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Lone Star Won’t Sell Bank to Kookmin

Posted November. 24, 2006 06:50,   


The American private equity fund, Lone Star Funds, broke a contract with Kookmin Bank (KB) it signed to sell the Korea Exchange Bank.

John Grayken, chairman of Lone Star Funds, made an official statement on November 23, saying, “It is uncertain when the investigation for Korea Exchange Bank will end. We have concluded that we cannot proceed with the contract to sell Korea Exchange Bank to KB.”

“When investigation is finished, we will consider our strategic choices again. We appreciate KB, which has shown its effort in this contract, and we are sorry for not completing it.”

KB failed to buy Korea Exchange Bank due to Lone Star’s sudden cancellation.

As a consequence, KB now faces considerable problems in its existing strategies to advance abroad, as well as in keeping its position as Korea’s “leading bank.”

A figure from KB said, “We will make an official announcement after a meeting.”

Financial experts predict Lone Star will maintain shares of Korea Exchange Bank by the end of this year to get profits, and that it will seek another company to sell.

Richard F. Wacker, president of Korea Exchange Bank, announced, “The Korea Exchange Bank will keep executives at present and deal with sales capacity and internal organizations.”

Chae Dong-wook, prosecutor at the Central Investigation Department of the Supreme Prosecutors’ Office, said, “The investigation (for suspicions regarding selling the Korea Exchange Bank for a low price) should go on. The investigation has not been prolonged. It has progressed according to schedule.”