Seoul growls at balky Hanaro lead investor

The opposition to LG Group’s attempt to take control of the troubled Hanaro Telecom is regrouping and getting new allies. LG has blocked several plans for getting the troubled Internet service provider back on its feet because the plans would not allow LG to increase its ownership stake to a majority. “If the shareholders of Hanaro do not approve the AIG and Newbridge Capital consortium’s investment of $500 million, I will discuss with the governor of the Korea Development Bank whether to put Hanaro under court receivership quickly,” said Chin Dae-je, the minister of Information and Communication at his monthly press briefing yesterday. Hanaro shareholders will meet Oct. 21 to vote on the capital infusion. Mr. Chin had been silent on the controversy at the firm, which this week escaped a default on bonds issued in overseas markets after a last-minute cash infusion from Korea Development Bank, its lead lender. Mr. Chin had maintained a studied neutrality, but yesterday he said that the investment would boost Hanaro’s standing among international investors and lenders. It would also help Hanaro clean up its books, he added. After the minister spoke, LG Group said that it would continue its attempts to scuttle the investment plan. Despite that show of defiance, other industry officials said, LG would ignore the comments at its peril. Hanaro officials said they would try to sign a contract with the consortium on Tuesday despite LG’s opposition and lobby shareholders to approve the contract at the meeting next month. The resolution to accept the consortium’s investment of $500 million was approved at a Hanaro board meeting on Aug. 29. Until yesterday’s comments by the minister, the closest that the government had come to intervening in the wrangle was a statement before the board vote urging all parties to accept whatever the outcome was. by Choi Hyung-kyu