Korea appeals World Bank ruling on Lone Star dispute

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Korea appeals World Bank ruling on Lone Star dispute

Published: 01 Sep. 2023, 12:31 Updated: 01 Sep. 2023, 13:04

JIN MIN-JI
jin.minji@joongang.co.kr

Justice Minister Han Dong-hoon speaks to reporters at the government complex in Gwacheon, Gyeonggi, on Aug. 9. [NEWS1]

The Korean government filed a complaint against the international tribunal's earlier ruling that ordered Korea to compensate $216.5 million to U.S. private equity firm Lone Star Funds over the selloff of Korea Exchange Bank in 2012.

The Ministry of Justice said Friday it filed an appeal to the World Bank's International Centre for Settlement of Investment Disputes (ICSID) to annul its decision in August 2022 on the decade-long dispute with the U.S. equity fund.

The government cited the ICSID's procedural violation and the absence of reasoning on the ruling for its appeal.

The $216.5 million compensation is 4.6 percent of the amount Lone Star demanded in the dispute settlement suit filed against Korea in 2012.

The decade-long suit started when Lone Star accused the Korean government of intervening in the sales of the Korean bank it acquired in 2003.

It said it had lost its chance to sell the bank at a much higher price to companies that showed interest, such as HSBC.

Lone Star purchased Korea Exchange Bank for nearly 1.4 trillion won ($1.08 billion) in 2003 and sold it to Hana Financial Group in 2012 for nearly 4 trillion won. HSBC's offer was close to 6 trillion won.

BY LEE HO-JEONG, JIN MIN-JI [jin.minji@joongang.co.kr]