International Arbitrator Rules in Favor of South Korea in 13 Year Dispute withe Private Equity Fund Lone Star
After 13 years since the sale of KEB happened it appears the Lone Star saga may finally be over:
An international arbitration body for investor–state dispute settlement has ruled in favor of South Korea in its challenge to the award for private equity fund Lone Star over its 2012 sale of a local bank, Prime Minister Kim Min-seok said Tuesday.
The International Center for Settlement of Investment Disputes (ICSID)’s annulment committee has nullified the earlier decision ordering South Korea to pay Lone Star US$216.5 million in compensation plus interest, Kim said in a briefing.
“The government’s compensation liability, which was roughly 400 billion won based on the current exchange rate, has been retroactively extinguished,” Kim said. “I believe that, thanks to our people’s support, the country’s fortune is moving in a positive direction.”
Under the latest ruling, Lone Star is required to pay South Korea’s legal costs incurred during the proceedings — about 7.3 billion won (US$4.98 million) — within 30 days, Kim added.
South Korea had appealed the ICSID’s 2022 ruling to pay the compensation to Lone Star, after the private equity fund filed a suit in 2012 claiming that the South Korean government interfered with the sale of Korea Exchange Bank (KEB), incurring $4.67 billion in losses.
The presidential office said it welcomes the ruling that has now “corrected the error.”
You can read more at the link, but basically Lone Star made a bunch of much money in Korea by selling the Korea Exchange Bank and then tried to take its profits outside the country. Their sale of the KEB led to large protests which caused the government to try and stop the sale any way it can. This all happened back in 2012 and was just one of a handful of anti-U.S. issues activists were using to stoke anti-American sentiment in Korea at the time.
