Finance official cleared in case involving buyout

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Finance official cleared in case involving buyout

Byeon Yang-ho, a former finance policymaker accused of leading a conspiracy to facilitate Korea Exchange Bank’s sale to a U.S. firm in 2003, was found not guilty by the Supreme Court yesterday, ending a nearly four-year-long court battle.

Byeon, who was the director general of the Ministry of Strategy and Finance’s financial-policy office in 2003, had been indicted in 2006 on charges of colluding with two Korea Exchange Bank executives to falsely state the financial health of the Korean lender. Prosecutors argued at the time that the bank’s financial trouble was exaggerated to bring about its sale to Lone Star Funds at a price lower than its actual value.

Upholding the district and high-court acquittals, the Supreme Court ruled yesterday that Byeon was not guilty.

The high court also upheld the acquittals of Lee Kang-won, former chief executive officer of KEB, and Lee Dal-yong, former chief financial officer of KEB.

“Taking into account the economic situation at the time of KEB’s sale, the necessity of action and the appropriateness of price, the initial acquittals were right,” the Supreme Court said.

Following an intensive investigation that went all the way up to Lee Hun-jai, then the economic deputy prime minister, Byeon was indicted in December 2006 on charges of colluding with Lone Star to undervalue Korea Exchange Bank’s assets while exaggerating its insolvency.

The prosecution argued at the time that the bank was sold lower than its appropriate price by at least 344.3 billion won ($309 million) or at most 825.2 billion won.

In November 2008, the Seoul Central District Court acquitted Byeon, and the Seoul High Court upheld the ruling in 2009.

In a telephone interview with Yonhap news agency, Byeon said he had no more to say about the case. He is currently working as a managing partner at Vogo Investment, a Korean buyout fund.

“Because of the court battle, I could not pay any attention to Vogo Investment,” he said. “I will concentrate my energy on my own projects from now on.”

His attorney, Noh Young-bo, said it was finally confirmed that Byeon had been unreasonably accused.

“It is my understanding that he had difficulty living a normal life until now, and I hope all misunderstanding will disappear and things return to normal.”

During the KEB trial, Byeon also faced another court battle after he was accused of accepting bribes from Hyundai Motor Group in return for using his influence to pressure Hyundai’s creditor banks to reduce the auto giant’s affiliates’ debt.

The Supreme Court, however, did question the reliability of a single lobbyist’s testimony, which the court believed was not enough to convict in previous trials, and acquitted him in 2009.

By Ser Myo-ja []
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