Court Clears Ex-Officials From Keb
Two former executives of Korea Exchange Bank and a former government official were found not guilty of trying to manipulate the bank’s sale to a U.S. investment firm in 2003, a court ruled in a decision likely to end a legal case that damaged South Korea’s reputation among foreign investors.
The ruling Monday determined the purchase by Dallas-based Lone Star Funds of a controlling stake in KEB was legal, removing an impediment to Lone Star’s attempts to sell the stake.
South Korean regulators routinely cited the existence of the case, which began two years ago, as a reason to delay approving Lone Star’s attempts to sell KEB, first to Kookmin Bank of South Korea and later to HSBC Holdings PLC of London.
Lone Star is unlikely to soon find a buyer for KEB, given the world-wide credit crisis. To make matters worse, KEB itself is coping with declining profits as it and other Korean banks try to raise deposits and reduce borrowings.
Lone Star’s legal difficulties reinforced perceptions that South Korea is hostile to profit-making by foreign investors, analysts said.
Tags: borrowings, credit crisis, existence, foreign investors, government official, hsbc holdings plc, impediment, korea exchange bank, korean banks, legal case, legal difficulties, lone star funds, perceptions, profits, regulators, south korea, stake