|
The U.S.-based fund Lone Star on Thursday announced it is terminating a deal to sell its 64 percent controlling stake in Korea Exchange Bank to Korea's biggest lender Kookmin Bank. "We have concluded that we cannot move forward with the sale of KEB to Kookmin Bank due to the continuing investigations surrounding Lone Star's investment in KEB and KEB's subsequent rescue of its credit card subsidiary, which have been extended several times and now have no firm completion date," said Lone Star chairman John Grayken, "Until then, we will continue to vigorously defend our company and our officers against the prosecution's groundless accusations."
If Lone Star means it is canceling the deal in accordance with the terms and conditions it agreed with Kookmin Bank, that is a matter between it and Kookmin. But it is another matter altogether if the fund means to accuse the prosecution of killing the deal. Lone Star executives have no fewer than six times declined to appear for questioning, insisting on a guarantee of safe passage home once they have said their piece. Which prosecutors in the world would offer such a guarantee before their questions have been answered? Flying in the face of common sense as it is, the demand is tantamount to a refusal to cooperate. If they are so sure of their innocence, there is no reason the Lone Star executives shouldn¡¯t oblige. It is this kind of shady behavior that has turned public opinion from suspecting prosecutors of an ulterior motive to smelling something very fishy about Lone Star.
Lone Star is continuing its maneuvering in the overseas press. The Financial Times, which is prone to putting Lone Star's side, said Wednesday, "Many financial players in Seoul, both foreign and South Korean, consider the investigation a 'witch-hunt' and expect it to put a significant dent in already low levels of inward investment." The Wall Street Journal said "protectionist sentiment remains" in Korea.
Lone Star has opted for the path of maximum resistance by harnessing the international press and threatening to scupper the sale of KEB to beat the investigation. That is begging for a response in kind from the Korean government and prosecution. As a way of defending Lone Star and its officers, it is a non-starter. The executives who have been summoned should present themselves to prosecutors and demonstrate their innocence. If they have issues with Korean public opinion, they should find better way of responding.
|
