Thursday, 18 December 2014
Last updated 18 hours ago
Jan 11 2008 | 1:00am ET
The chairman of hedge fund Lone Star Funds may be spending more time in South Korea than he planned, after prosecutors slapped a 10-day travel ban on him.
John Grayken traveled to the country yesterday to testify in the stock-price manipulation trial of one of its portfolio companies. Prosecutors have sought to question Grayken for months, and said he would be brought in for questioning after his court appearance, scheduled for today. It would not say how long he would be detained for; South Korean prosecutors can hold a person in custody for up to a month before arresting them.
At issue is Lone Star’s purchase of a majority stake in Korea Exchange Bank in 2003. Some labor unions and politicians alleges that the hedge fund colluded with KEB management to depress its stock price in advance of that deal, in which Lone Star paid US$1.2 billion for a 65% share of the firm.
Lone Star came under a hail of criticism in 2006, when it agreed to sell KEB to Kookmin Bank at a US$4 billion profit. Last year, it broke off that deal, saying KEB’s value has grown further, striking a new tentative agreement in September to sell the bank to HSBC. This time around, the Dallas-based hedge fund stands to turn a US$5 billion, though the South Korean Financial Supervisory Commission has said it will not make a decision on the proposed deal until the legal situation is resolved.
Grayken has defended his firm’s stewardship of KEB, saying Lone Star’s investment and management shakeup resulted in its soaring value.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.