ID :
211758
Sat, 10/08/2011 - 04:09
Auther :
Shortlink :
https://oananews.org//node/211758
The shortlink copeid
How to let Lone Star go
The Korea Times
(Yonhap) - The Seoul High Court's verdict of guilty on Lone Star Fund Thursday provided a long-sought way out for the U.S. buyout firm. Now the Texas-based private equity fund has only to pay a paltry amount in penalties and pack off with a 5 trillion-won bounty winding up its eight-year stay here.
Few can change this scenario, at least legally. The financial regulators have little legal ground to dictate ways for Lone Star to unload its 51-percent equity in Korea Exchange Bank (KEB) to Hana Financial Holdings at agreed prices of 4 trillion won in six months. The company has already garnered about 1 trillion won from dividends and block sales.
True, the longer the financial authorities try to keep Lone Star here, the larger the investment returns for the U.S. fund, or the outflow of national wealth, it seems. Worse yet, Korea might earn the unwelcome stigma as the investment destination with a wide open entrance and an extremely narrow exit.
Even the loud protests against the "eat-and-run" U.S. financier among civic groups and the KEB unionists can appear as unwarranted envy of legal profit-making or stick-to-iron-bowl struggle, if not downright xenophobia or unjustifiable hostility against foreign capital. It was only a decade ago that Koreans welcomed them as saviors when their country was smarting from the financial crisis.
Korean taxpayers can accept all this, thinking these are expensive lesson fees for hasty decisions of eight years ago, which critics describe as the "original sin" of the financial officials. The problem is, the same financial regulators, who failed to correctly discern whether Lone Star was a financial capital or an industrial capital that cannot acquire a Korean bank under the domestic law, are still sitting at the top desks -- and are not doing their jobs properly.
Some say it would be useless to argue about Lone Star's qualifications retroactively. But there is evidence the U.S. firm has become an industrial capital, for instance, by buying out the Japanese golf courses worth more than the legal criteria of 2 trillion won.
There are also views that the conviction allows local financial authorities to suspend the voting rights of Lone Star as the controlling shareholder of KEB. Moreover, litigations are still under way to determine the U.S. investor's voting rights with respect to its initial qualifications and recent changes in them.
It is easy to let Lone Star go with just the payment of some fines, taxes and even compensation. Foreign investors will cheer Seoul for its neat handling of the drawn-out legal disputes.
Or jeer inside. The nation neither needs to appear xenophobic with a vague and unnecessary bias nor seem naive and loose, a place where financially and legally experienced foreign investors can always use as their playground.
The financial officials must do what they can "legally," something they failed to do in 2003. That is the only way to deserve the enormous lesson fees paid by taxpayers.
(Yonhap) - The Seoul High Court's verdict of guilty on Lone Star Fund Thursday provided a long-sought way out for the U.S. buyout firm. Now the Texas-based private equity fund has only to pay a paltry amount in penalties and pack off with a 5 trillion-won bounty winding up its eight-year stay here.
Few can change this scenario, at least legally. The financial regulators have little legal ground to dictate ways for Lone Star to unload its 51-percent equity in Korea Exchange Bank (KEB) to Hana Financial Holdings at agreed prices of 4 trillion won in six months. The company has already garnered about 1 trillion won from dividends and block sales.
True, the longer the financial authorities try to keep Lone Star here, the larger the investment returns for the U.S. fund, or the outflow of national wealth, it seems. Worse yet, Korea might earn the unwelcome stigma as the investment destination with a wide open entrance and an extremely narrow exit.
Even the loud protests against the "eat-and-run" U.S. financier among civic groups and the KEB unionists can appear as unwarranted envy of legal profit-making or stick-to-iron-bowl struggle, if not downright xenophobia or unjustifiable hostility against foreign capital. It was only a decade ago that Koreans welcomed them as saviors when their country was smarting from the financial crisis.
Korean taxpayers can accept all this, thinking these are expensive lesson fees for hasty decisions of eight years ago, which critics describe as the "original sin" of the financial officials. The problem is, the same financial regulators, who failed to correctly discern whether Lone Star was a financial capital or an industrial capital that cannot acquire a Korean bank under the domestic law, are still sitting at the top desks -- and are not doing their jobs properly.
Some say it would be useless to argue about Lone Star's qualifications retroactively. But there is evidence the U.S. firm has become an industrial capital, for instance, by buying out the Japanese golf courses worth more than the legal criteria of 2 trillion won.
There are also views that the conviction allows local financial authorities to suspend the voting rights of Lone Star as the controlling shareholder of KEB. Moreover, litigations are still under way to determine the U.S. investor's voting rights with respect to its initial qualifications and recent changes in them.
It is easy to let Lone Star go with just the payment of some fines, taxes and even compensation. Foreign investors will cheer Seoul for its neat handling of the drawn-out legal disputes.
Or jeer inside. The nation neither needs to appear xenophobic with a vague and unnecessary bias nor seem naive and loose, a place where financially and legally experienced foreign investors can always use as their playground.
The financial officials must do what they can "legally," something they failed to do in 2003. That is the only way to deserve the enormous lesson fees paid by taxpayers.
