ID :
211534
Thu, 10/06/2011 - 12:29
Auther :
Shortlink :
https://oananews.org//node/211534
The shortlink copeid
Watchdog may order Lone Star's KEB stake sale
SEOUL, Oct. 6 (Yonhap) -- South Korea's financial regulator said Thursday it may order Lone Star Funds to sell the bulk of its stake in Korea Exchange Bank (KEB) if it fails to meet legal requirements as the lender's major shareholder.
The U.S. private equity fund holds a controlling 51.02 percent stake in KEB, the fifth-largest lender in South Korea. Lone Star's eligibility has been thrown into question following a stock manipulation case by a former head of its local unit.
"If Lone Star fails to meet the requirements, it will be ordered to sell the stake that exceed its holding limit," the Financial Services Commission (FSC) said in an e-mailed statement.
The method and timing of the possible stock sale order have yet to be determined, the FSC added.
The statement came after a Seoul high court ruled Thursday that the ex-head of Lone Star Korea was guilty of manipulating stock prices in connection with the acquisition of a KEB card unit. The ruling will be finalized if Lone Star does not appeal to the nation's top court within seven days.
Korean law bans an executive or corporate entity from becoming the primary shareholder of a local bank if convicted for a crime over the last five years,
Unless Lone Star is found to be an eligible shareholder, it would be requested to sell a 41.02 percent stake in KEB, which is expected to accelerate the long-delayed sale of the lender.
In November last year, the U.S. buyout fund had struck a 4.69 trillion won deal (US$3.95 billion) with No. 4 banking group Hana Financial Group Inc. to sell off its KEB stake. In July, the two sides agreed to extend the deal until November at a lower price of 4.41 trillion won.
The deal, however, has been in legal limbo since the FSC indefinitely delayed its approval, citing a lawsuit over Lone Star's alleged wrongdoing in its 2003 purchase of the credit card unit.
The U.S. private equity fund holds a controlling 51.02 percent stake in KEB, the fifth-largest lender in South Korea. Lone Star's eligibility has been thrown into question following a stock manipulation case by a former head of its local unit.
"If Lone Star fails to meet the requirements, it will be ordered to sell the stake that exceed its holding limit," the Financial Services Commission (FSC) said in an e-mailed statement.
The method and timing of the possible stock sale order have yet to be determined, the FSC added.
The statement came after a Seoul high court ruled Thursday that the ex-head of Lone Star Korea was guilty of manipulating stock prices in connection with the acquisition of a KEB card unit. The ruling will be finalized if Lone Star does not appeal to the nation's top court within seven days.
Korean law bans an executive or corporate entity from becoming the primary shareholder of a local bank if convicted for a crime over the last five years,
Unless Lone Star is found to be an eligible shareholder, it would be requested to sell a 41.02 percent stake in KEB, which is expected to accelerate the long-delayed sale of the lender.
In November last year, the U.S. buyout fund had struck a 4.69 trillion won deal (US$3.95 billion) with No. 4 banking group Hana Financial Group Inc. to sell off its KEB stake. In July, the two sides agreed to extend the deal until November at a lower price of 4.41 trillion won.
The deal, however, has been in legal limbo since the FSC indefinitely delayed its approval, citing a lawsuit over Lone Star's alleged wrongdoing in its 2003 purchase of the credit card unit.
