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Hana Financial wins lawsuit against Lone Star over bank purchase deal

Hana Financial wins lawsuit against Lone Star over bank purchase deal

Posted May. 16, 2019 07:46,   

Updated May. 16, 2019 07:46


South Korea’s major banking group Hana Financial Group Inc. said Wednesday it has won a 1.4 billion-U.S.-dollar international arbitration suit against U.S. private equity fund, which filed the suit at the International Court of Arbitration under the International Chamber of Commerce (ICC) in 2016 over Hana’s purchase of KEB Hana Bank, formerly known as Korea Exchange Bank.

It has been known that the end of the suit will soon be followed by a conclusion of the U.S. investment fund’s 4.7-billion-dollar investor-state dispute (ISD) claim against the South Korean government.

Lone Star filed the suit, accusing Hana Financial of having threatened to lower the price of Korea Exchange Bank to win Seoul’s approval of the deal. However, the international court rejected Lone Star’s claim.

Lone Star purchased Korea Exchange Bank in August 2003 before selling it to Hana in January 2012. However the U.S. equity fund filed an ISD claim against the South Korean government in November 2012, claiming that it suffered losses because Seoul delayed the sale of Korea Exchange Bank and imposed unfair taxes. Experts expect that now that a ruling is out on the Lone Star-Hana case, the ISD claim will likely be concluded in the latter half of this year.

Eun-A Cho achim@donga.com