Regulator to determine Lone Stars eligibility as KEB owner

The country's top financial regulator has said the watchdog will push to make a final decision this month over whether Lone Star Funds has the legal right to be the top shareholder of Korea Exchange Bank (KEB).

Financial Services Commission (FSC) Chairman Kim Seok-dong said in a meeting with reporters, "We are working to make a final decision on Lone Star's eligibility in April."

The regulator is expected to deliberate on the matter on April 6 and 20 during its regular semimonthly decision-making councils.

Kim's comments came after the FSC decided in mid-March to delay the decision after the Supreme Court convicted Lone Star's former local head of illegally purchasing KEB's credit card unit in 2003.

The watchdog cleared one of the major hurdles for Lone Star to win eligibility status by concluding the fund is a financial-oriented investor that could legally hold more than a 9 percent stake in a local financial company. The FSC, however, added that it needs more time to legally determine whether the recent court ruling should constitute a reason to deprive Lone Star of its eligibility.

According to local banking laws, if Lone Star is to be eligible, the company must be clear of legal violations for the last five years.

The eligibility decision is a critical prerequisite for Lone Star to execute its November deal with local banking group Hana Financial Group Inc. to sell its 51.02 percent stake in KEB. (Yonhap)