Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Yulchon's reputation rests on 1.6 trillion won Indonesian lawsuit facing client KB
Bukopin Bank's main branch in Jakarta / Courtesy of KB Kookmin Bank
By Park Jae-hyuk
By Park Jae-hyuk
Yulchon, one of the largest law firms in Korea, has come under the spotlight after KB Kookmin Bank was embroiled in a 1.6 trillion won ($1.4 billion) lawsuit in Indonesia over its acquisition of Bukopin Bank, which had been completed last August in accordance with the Korean law firm's advice.
The outcome of the latest litigation, which remains unclear at this moment, appears set to sway the reputation of Yulchon, which has aggressively helped Korean banks with cross-border acquisitions in the Southeast Asian country, including state-run Korea Development Bank's takeover of Tifa Finance last September.
When KB Kookmin was trying to take over Bukopin last year, the law firm was known as a “hidden force” by plotting strategies for dealing with the Indonesian bank's largest shareholder, helping the Korean bank obtain a license from financial authorities in both countries, structuring the transaction, performing due diligence and drafting the purchase agreement.
KB Financial Group's latest regulatory filing, however, showed Tuesday that its banking unit was sued by Bosowa Corp., Bukopin's former top shareholder that became the second-largest with an 11.6 percent stake after KB Kookmin became the largest one with a 67 percent stake.
Bosowa, which has claimed that KB Kookmin's takeover of Bukopin was unlawful, claimed damages against the Korean bank and the Financial Services Authority of Indonesia. The Indonesian conglomerate already defeated the Indonesian financial regulator in a separate administrative litigation this month.
KB Kookmin said in the regulatory filing that the complainant's claim is untrue and that the amount of money it seeks is excessive, considering Bukopin's equity capital stood at 816.2 billion won as of last September.
“It is difficult to predict the outcome of the litigation at this moment, but there is a slim chance that the lawsuit would have a significant impact on our financial status,” the bank said.
A KB Kookmin spokesman declined to mention the bank's attorney for this lawsuit. Yulchon has yet to provide comments on this issue.
The legal battle between KB Kookmin and Bosowa will take place at Central Jakarta District Court, according to KB Financial Group.
Amid concerns over the sustainability of its business in Indonesia, KB Financial Group decided to donate 200 million won to help victims of an earthquake that hit the Southeast Asian country's province of Sulawesi this month. KB said Bukopin and KB Finansia Multi Finance, an Indonesian subsidiary of KB Kookmin Card, will deliver the money to the Red Cross Society there.
“We will do our best for the local community to fulfill our responsibility as a corporate citizen in Indonesia,” KB Financial Group Chairman Yoon Jong-kyoo was quoted as saying in a press release.