Opposition submits proposal to investigate into regulator’s OK of fund’s takeover of KEB
Financial regulators are expected to make public their stance on Lone Star Funds this week as to whether the U.S.-based fund was eligible to own Korea Exchange Bank between 2003 and 2006.
“The Financial Services Commission has notified that it would send related documents on Lone Star to us on Dec. 15,” a researcher of the Solidarity for Economic Reform said Tuesday.
The regulator’s coming move reflects a Nov. 24 ruling by the Supreme Court, which ordered the FSC and the Financial Supervisory Service to disclose their documents on Lone Star’s eligibility as the biggest shareholder of KEB.
But the regulators -- FSC and FSS -- have no obligation to make public the equity fund’s eligibility between July 2006 and December 2011 as the civic group SER demanded documents between 2003 and June 2006 in its initial suit in 2007.
SER has insisted that Lone Star was a “non-financial” investor, which is banned from owning a local bank.
Through a series of procedures between July and September 2003, the FSC approved Lone Star’s acquisition of KEB in September 2003.
Shortly after the court’s ruling, an FSC official said that if “the FSC had internally ruled that Lone Star was a non-financial one at that time, (we) would have taken (punitive) measures.”
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, the official said regulatory investigators are probing the speculation.
On the same day, the main opposition Democratic Party submitted a motion for parliamentary investigation into a variety of allegations to the National Assembly. The allegations include regulators’ behind-the-scenes endorsement of Lone Star’s KEB takeover in 2003 and dubious preliminary deal between Hana Financial Group and Lone Star to trade KEB shares, according to the motion, signed by all of the 87 DP lawmakers.
“As irregular practices of Lone Star and financial regulators have newly been being uncovered, we cannot entrust the issue with regulators any more,” Rep. Ooh Che-chang said.
A group of lawmakers from the ruling Grand National Party have also criticized the FSC for having been negligent in probing the fund’s eligibility.
By Kim Yon-se
(
kys@heraldcorp.com)
