Court orders detention for former head of Lone Star Korea

SEOUL, July 21 (Yonhap) -- A Seoul court issued an order Thursday to detain the former head of U.S.-based Lone Star Funds' local unit, who was indicted on charges of stock price manipulation when the fund took over a local bank's credit card unit in 2003.
The Seoul High Court delivered the decision to Yoo Hoe-won in a court hearing, citing the possibility of his fleeing before the final ruling is made.
"The court-ordered detention was decided due to worries about the defendant's possible fleeing," Judge Jo Kyung-ran said.
"It does not necessarily mean he will be sentenced to a jail term," the judge said.
The high court is retrying Yoo's case after the Supreme Court in March overturned its previous not-guilty verdict and sent the case back for reconsideration.
Yoo was indicted on charges that he issued a false capital reduction plan to drive down stock prices of the credit card unit of Korea Exchange Bank in 2003 in order to take over the card unit for a cheap price. The credit card firm was later merged into the bank in which Lone Star has been the biggest shareholder since 2003.
Any guilty decision against Yoo is expected to deal a hard blow to Lone Star's eligibility as the bank's biggest shareholder in South Korea where a lawbreaking executive or corporate entity is not allowed by law to become the top shareholder in a bank.
It will also put a roadblock in the way of the U.S. buyout fund's plan to offload its shares in the fifth-largest local lender.
pbr@yna.co.kr