SEJONG, April 21 (Korea Bizwire) — South Korea’s sovereign wealth fund has violated its own rules in its move to buy into the Los Angeles Dodgers, a lawmaker said Tuesday.
The Korea Investment Corporation (KIC), which manages assets entrusted by South Korea’s central bank, has reportedly been in talks to buy a 19 percent stake in the baseball club from U.S.-based investment firm Guggenheim Partners, a deal estimated at 400 billion won (US$369 million).
Rep. Park Won-suk said KIC chief Ahn Hong-chul’s meeting with executives of Guggenheim Partners, an investment firm that owns the team, on Jan. 12 violated internal guidelines limiting the chairman’s role.
The KIC rules stipulate that the chairman can only take part in the investment process at the very last moment when a committee is formed to make a final decision.
“Ahn’s meeting with Guggenheim Partners executives even before official investment talks got underway is a clear breach of rules,” said Park of the minor opposition Justice Party.
Ahn’s meeting took place without other KIC officials present, and the sovereign fund has tried to withhold information about the contract, the lawmaker claimed.
Ahn may have even broken a non-disclosure agreement with Guggenheim Partners by emphasizing that KIC investment has been guaranteed to generate profit in an interview with a local news outlet earlier this month.
In light of actions taken by Ahn, the government should dismiss him from his post, the lawmaker said. The National Assembly is scheduled to ask the Board of Audit and Inspection of Korea to investigate the deal being pursued by the KIC.
The LA Dodgers, which have won the World Series six times, are hugely popular among South Koreans as Korean star pitcher Ryu Hyun-jin currently plays on the team. The club, however, has been in the red in recent years, mainly due to the cost of renovating its home stadium.
Concerns have been raised because if the team goes bankrupt, KIC could lose its investment. The sovereign wealth fund has yet to disclose details of its investment plan.