FSC follows court’s ruling to publicize U.S. fund’s eligibilityThe Financial Services Commission has made public its records on Lone Star Funds from the eight years since the regulator approved the fund’s takeover of Korea Exchange Bank in 2003.
On Thursday, the FSC sent related documents on Lone Star to the civic group Solidarity for Economic Reform.
The documents involve the regulator’s ruling as to whether the U.S.-based fund was eligible to own KEB between September 2003 and June 2006.
After a four-year-long suit between the FSC and the civic group, the Supreme Court ― in its Nov. 24 verdict ― ordered the FSC and the Financial Supervisory Service, an executive arm of the FSC, to reveal the records.
The FSC, which lost the original trial in 2007 and the second trial in 2009 in a lawsuit filed by SER, appealed to the highest court two years ago. The regulator has now lost its final case.
“(It will take at least) several days for us to fully analyze the documents,” a researcher at SER said. “We plan to unveil our stance as early as next week.”
An FSC spokesman has said that the regulatory interpretation at that time was that Lone Star could not be regarded as a non-financial investor, and was eligible to own a Korean bank at least between 2003 and June 2006.
He also said that “not a non-financial” investor is the same as a “financial investor.”
“If the FSC had internally ruled that Lone Star was a non-financial one at that time, the regulator would have taken punitive measures,” he said.
Concerning the speculation that Lone Star has owned 130 golf courses worth about 3.7 trillion won ($3.2 billion) in Japan since at least 2005, hinting at it being a non-financial investor, he said the issue will be unveiled later.
The nation’s banking laws ban an investor with non-financial assets exceeding 2 trillion won from controlling a Korean bank.
Further, there is a speculation that the U.S. fund recently sold off the golf courses following criticism from ruling and opposition lawmakers as well as the KEB union in Korea.
Meanwhile, financial regulators are suspected of fabricating documents on Lone Star Funds in 2003, according to a TV news report.
At least over the past few months, the FSC (then the Financial Supervisory Commission) has argued that the records, submitted by an accounting firm, prove that Lone Star was eligible to own a Korean bank.
But the documents were allegedly drawn up by financial authorities ― the FSC or the FSS ― not by the accounting firm Samjong KPMG, the news report said.
By Kim Yon-se, Cynthia J. Kim
(
kys@heraldcorp.com) (
cynthiak@heraldcorp.com)
