Korean Government May Owe Lone Star Funds Hundreds of Millions of Dollars

Another one of these long term anti-US issues has come back up again:

Leaders of Korea Exchange Bank’s union attempt to enter the building of the Financial Services Commission (FSC) in Seoul on Nov. 18, 2011, as the FSC holds a meeting to discuss whether to order Lone Star Funds to sell most of its stake in Korea Exchange Bank. The workers are calling for the authorities to impose a punitive measure against Lone Star’s stake sale, such as ordering the fund to sell its share on the market, in a bid to prevent the buyout fund from pocketing more than twice the money it spent on purchasing KEB stocks.

Lawyers for a Democratic Society (LDS) sent a letter to the International Center for Settlement of Investment Disputes (ICSID), Tuesday, demanding a speedy settlement of the dispute between the Korean government and the U.S. buyout fund Lone Star Funds over the sale of the Korea Exchange Bank (KEB).

“The process of the legal battle worth 5 trillion won ($4.68 billion) has been shrouded in secrecy since 2012, so we requested rapid processing under the principle of transparency,” Song Ki-ho, the chairman of the international trade committee at the LDS, told the Korea Times.

The nongovernmental organization has a special consultative status with the United Nations Economic and Social Council.

In 2012, Lone Star filed a request with the ICSID, claiming the Korean government should compensate it for the “belated” approval of its sale of its KEB stake to Hana Financial and return the taxes it paid during the delay.

The global private equity firm acquired a 51.02 percent stake in KEB from a German bank in 2003, but exited Korea in 2012 after selling the stake and gaining about 4.9 trillion won in profit.  (….)

Observers said the ruling will come around March this year and note the Korean government may have to pay Lone Star hundreds of billions of won in compensation. Some point out the government may claim a part of the money from Jun Kwang-woo, a former chairman of the Financial Services Commission.  [Korea Times]

You can read more at the link, but basically the crime Lone Star made was that it made too much money in Korea and then tried to take its profits outside the country.  Their sale of the Korea Exchange Bank led to large protests which caused the government to try and stop the sale any way it can.

South Korean Ruling Party Leader Surprised President Trump Asked To Move Korean Factories to the US

I don’t see what is so surprising about President Trump’s comment, it is no secret that he has been pushing to bring manufacturing jobs back to the United States:

While circling the sky near the inter-Korean border last week, U.S. President Donald Trump posed a question that later took the leader of South Korea’s ruling party by surprise.

According to Choo Mi-ae of the Democratic Party, Trump was on his Marine One helicopter to the heavily fortified demilitarized zone when he turned to White House chief economic director Gary Cohn and said: “I just saw something amazing. There are so many factories. Can’t they be built in the U.S.?”

The trip to the DMZ was later canceled due to fog and Trump had to turn back to Seoul to continue his two-day state visit. The trip was watched closely because Trump had threatened to use military options against North Korea and engaged in a war of words with the regime over its nuclear and missile programs.

“I think President Trump understood, while he was in the air for 30 minutes, that 25 million people were living in the area below him and that they would be wiped out in the event of war,” Choo said in a meeting with reporters in New York. “But I was so surprised when Director Cohn told me this story. Wasn’t (Trump) essentially saying we should build our auto parts factories in the U.S., too?”  [Yonhap]

You can read more at the link.

Paris Baguette Faces $46.5 Million Fine for Outsourcing Bakers

Paris Baguette is about to get hit with a huge fine if it doesn’t directly hire 5,400 bakers in 25 days:

Paris Baguette is facing its biggest crisis in its history as it has been ordered by the government to hire 5,400 patissiers directly, placing a heavier financial burden on Korea’s largest bakery franchise.

Currently, most patissiers working at Paris Baguette franchisees are dispatched by the firm’s 11 partner firms, but are trained and supervised by the bakery.

The Ministry of Labor and Employment is calling the practice illegal because patissiers are not one of 32 occupations allowed to be outsourced under the law, ordering the bakery to directly hire them.

The ministry said Paris Baguette opts to have its small business partners hire workers and send them to work for it, which costs less than directly hiring them as regular employees.

However, Paris Baguette said it shouldn’t be obliged to hire patissiers, adding they do not work for the franchise headquarters. The bakery said patissiers work at franchisees, stressing it trains and supervises them on behalf of franchised store owners.

The company said it is considering filing an administrative litigation against labor ministry’s order to directly hire bakers dispatched by its partner firms.

The ministry concluded Thursday that Paris Baguette has directly supervised bakers dispatched by its partner companies, violating the legal dispatch code of the labor law. The ministry ordered it to directly hire all of the 5,378 bakers who are working at its 3,396 franchise stores.

If Paris Baguette does not comply with the order within 25 days after receiving the official document, it would face a fine of up to 53 billion won ($46.5 million).  [Korea Times via reader link]

You can read more at the link, but I don’t see any evidence in the article of the bakers being mistreated by the franchisees that hired them.  I think there is probably more to this story than what is published in the article.

McDonald’s Korea Files Court Injunction to Stop Release of Food Inspection Results

From my perspective the McDonald’s in South Korea always seem cleaner and more professionally run than most I see back in the US:

An inspector of the Korea Consumer Agency leaves a McDonald’s restaurant in Gangnam, Seoul, carrying an ordinary paper bag without an airtight sterilization container./ Courtesy of McDonald’s Korea

McDonald’s Korea has filed a court injunction against the disclosure of the results of the Korea Consumer Agency’s sanitary inspection, the U.S.-based fast food chain said Wednesday.

The agency recently investigated 38 hamburgers marketed by six fast food franchises and five convenience store chains, following lawsuits over alleged undercooked McDonald’s patties.

Five Korean consumers have sued the company so far, claiming their children suffered hemolytic-uremic syndrome (HUS), or the so-called “hamburger disease,” after eating McDonald’s hamburgers.

Although none of the products contained the controversial E. coli bacteria, which is known to cause HUS, the agency found that one McDonald’s hamburger contained staphylococcus aureus above the standard level. The bacterium is a common cause of food poisoning.

The agency initially planned to unveil its findings Tuesday, but scrapped the plan following McDonald’s Korea’s complaint that was applied a day earlier.

McDonald’s Korea criticized the agency for neglecting the required procedures.

“Food hygiene tests should be conducted by trained inspectors who should not hide their identity. A sample should be contained in an airtight sterilization container as well,” a spokeswoman of McDonald’s Korea said.

“However, an inspector, who visited our Gangnam store, pretended to be an ordinary customer. He also carried the sample in a paper bag, not immediately putting it into an airtight sterilization container.”  [Korea Times]

You can read the rest at the link, but I can understand McDonald’s beef (pun intended) if the inspectors are not conducting inspections by agreed upon standards.

President Moon to Hold Beer Summit with ROK Business Leaders

Considering that President Moon has plans to increase taxes on the wealthy and businesses to create a welfare state, President Moon better serve some pretty good beer to get these ROK business leaders on board:

President Moon Jae-in is set to hold his first dialogue with top business leaders here this week over beer to help break the ice and possibly allow more frank discussions, an official from the presidential office, Cheong Wa Dae, said Tuesday.

The talks will be held Thursday and Friday, each day involving part of the top executives from the 14 largest business conglomerates, according to Cheong Wa Dae spokesman Park Soo-hyun.  [Yonhap]

You can read more at the link.

 

Samsung Heiress Lee Seo-hyun Named One of the Top 10 Most Beautiful Billionaires

It is hard to believe that she is 44-years old, she looks great:

Lee Seo-hyun, president of Samsung C&T’s fashion group

Samsung C&T’s fashion group President Lee Seo-hyun has been selected as one of the 10 most beautiful female billionaires in the world by Trendchaser, a U.S.-based outlet specializing in entertainment trends and news.

Lee is a daughter of Samsung Chairman Lee Kun-hee. Her older brother is Samsung Electronics Vice Chairman Lee Jae-yong, the de facto leader of Samsung, and her older sister is Hotel Shilla CEO Lee Boo-jin.

Trendchaser introduced 10 female billionaires aged between 19 and 50 under the headline “Youth, Fame, Beauty, and Fortune: These Ladies Have it All.” It named Virgin Group heiress Holly Branson, Ralph Lauren’s daughter Dylan Lauren and Hearst heiress Amanda Hearst as well.

Trendchaser wrote that some of them made their fortunes on their own, while others inherited the family business.

Although the 44-year-old executive seems to be closer to the latter, the report noted she expanded the company’s business horizons into fashion and chemicals. She was also responsible for buying Italy-based fashion house Colombo Via Della Spiga.  [Korea Times]

You can read more at the link, but she is reportedly worth $1.5 billion.  If anyone is wondering she is married with four kids. They could have easily added her sister Lee Boo-jin to the list as well.

Lee Boo-jin and her ex-husband Im Woo-jae.

ROK Heads may remember that Lee Boo-jin recently went through a billion dollar divorce fight with her ex-husband.  So if there are any ROK Heads looking to marry a billionaire she is still available.

Lee Seo-hyun also has a brother.  Her brother is Samsung Chairman in waiting Lee Jae-yong who was arrested for corruption for his alleged role in the Choi Soon-sil scandal.  There is actually a fourth Lee sibling, Lee Yoon-hyung, but she tragically committed suicide all the way back in 2005 in New York City:

She was very pretty as well, but allegedly committed suicide because she was forbidden by her father from marrying her boyfriend because his class was too low in South Korea.

Picture of the Day: Seoul Stock Market Rise Despite Tensions

Seoul stocks hit 6-year high

An electronic board in a Korea Exchange Bank dealing room shows the country’s benchmark Korea Composite Stock Price Index (KOSPI) on April 25, 2017. The KOSPI soared 23.11 points, or 1.06 percent, on foreign buying, to close at 2,196.85, marking the highest since April 22, 2011, when the comparable figure was 2,197.82 points. (Yonhap)