“The lawsuit is very important, partly because of the amount of money. And mainly because it can be a barometer of Korea’s financial openness. The Korean government will show that it is taking transparent and legal action in dealing with the issue. We are doing so under the principle of due process without procedural problems. This is our stance.”
“A decision-making process in a government is very complex and complicating, taking a long time. We have to check which policy would cause less side effects and satisfy more people. The decision could not meet those conditions at the time. Now, the Seoul government is making all-out efforts to defend its arguments.”
- Yim Jong-yong, chairman of the Financial Services Commission (FSC)
SEOUL, May 21 (Korea Bizwire) – South Korea is taking a transparent and lawful stance on dealing with the ongoing legal dispute with U.S. equity fund Lone Star over its sale of a major commercial bank and other assets here years ago, Seoul’s top financial regulator said Thursday.
Lone Star lodged a complaint against the South Korea government before the International Centre for Settlement of Investment Disputes in 2012, claiming that it was forced to pay unfair taxes and suffered losses due to Seoul’s delay in approving a profitable deal. It demanded South Korea pay it nearly US$4.68 billion in compensation.
As the case’s first hearing started last week in Washington, the South Korean government dispatched a team of government officials and lawyers to cope with the case.
Lone Star had agreed to sell a controlling stake in Korea Exchange Bank (KEB) to global banking giant HSBC for 5.94 trillion won ($5.4 billion) in 2007. But the contract was scrapped because the South Korean government did not give approval for the deal.
The U.S. firm sold the stake to Hana Financial Group for some 3.9 trillion won five years later.
Yim jong-yong, chairman of Financial Services Commission, said the South Korean government had made a right decision at the time after considering various matters and surrounding conditions.
A second hearing is scheduled to take place for 10 days from June 29.