SK Telecom to Sue Foreign Consortium

SK Telecom plans to file a lawsuit against a consortium of foreign investors in regards to its purchase of Hanaro Telecom shares in December last year. The nation’s largest wireless carrier claims that the consortium, which includes Newbridge and AIG, has failed to inform the company of details of the then ongoing police investigation.

The consortium used to hold a majority stake in Hanaro Telecom before the sale. The planned lawsuit is drawing much attention since local businesses have rarely taken legal action against foreign funds over details of M&A agreement.

A source from SK Telecom said yesterday the mobile firm is trying to sue the consortium. “We found that Newbridge-AIG consortium, which had a major stake at that time, did not fully inform (SK Telecom) of how serious police investigation was, when the two sides signed an agreement last year,” he said.

SK Telecom argues that it has suffered significant damage, both tangible and intangible, due to an exodus of Hanaro Telecom subscribers, class action suits and a fall in the brand value, after police released the probe result on the leakage of personal information from Hanaro Telecom on April 23.

While considering whether to file a lawsuit against the consortium, the Korean mobile carrier has struck a snag because the foreign consortium and nine other funds including Newbridge Asia HT, L.P., which also participated in the consortium, have all been dissolved.

However, after a thorough review, SK Telecom decided that the consortium was liable for its damage. The lawsuit is expected within this month at the earliest.

Goldman Sachs, which was Hanaro Telecom’s strategic adviser at the time of sale, refused to comment and said, “We have nothing to release unless SK Telecom officially begins its move.”

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