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Parliamentary committee adopts resolution on canceling Lone Star's KEB purchase

A parliamentary committee on Friday adopted a resolution calling for the cancellation of a U.S. private equity fund's purchase of Korea Exchange Bank (KEB) in 2003 and the punishment of officials involved in the deal.

The National Assembly Legislation and Judiciary Committee took the step after the country's audit agency and prosecution found Lone Star's acquisition of KEB "improper" and concluded the bank's financial soundness had been misstated to clear the way for the takeover. The U.S. firm has rejected the findings.

The committee said in the resolution, "(The government) unfairly approved the purchase even though Lone Star had violated pertinent bank laws and was not qualified for the takeover."

The resolution said 11 officials were punishable, including then Vice Finance Minister Kim Seok-dong and Yang Cheon-sik, chief of Korea EXIM Bank at the time of the 2003 deal.

Lone Star Funds bought a 50.5 percent stake in KEB for 1.4 trillion won (US$1.48 billion).

Seoul, March 30 (Yonhap News)

Posted on : Mar.30,2007 20:56 KST

Modified on : Mar.31,2007 15:14 KST

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