FSC to launch taskforce for Lone Star suit

The Financial Services Commission building in central Seoul / Korea Times file

By Kim Bo-eun

The Financial Services Commission (FSC) will launch a taskforce that will focus on affairs relating to financial disputes, the regulator said Sunday.

The taskforce, scheduled to begin operation on July 19, is set to deal with the Lone Star suit with the government.

Lone Star filed an investor-state dispute settlement (ISDS) in November 2012, seeking over $4.7 billion (5.5 trillion won) from the government, claiming financial authorities deliberately delayed the sales of Korea Exchange Bank (KEB) shares and unfairly imposed a punitive tax.

The U.S.-based private equity fund acquired KEB in 2003. It attempted to sell KEB to HSBC in 2006 but failed. In January 2012, the then-Hana Bank acquired KEB.

The ISDS case is expected to reach a settlement within the year.

Earlier in May, KEB Hana Bank won an international arbitration case against Lone Star over its purchase of KEB.

Lone Star filed the suit with the International Chamber of Commerce (ICC) in 2016, seeking over $1.4 billion citing Hana cut the buyout price of KEB.

The ICC dismissed the allegation that Hana threatened “there would be no approval unless a price reduction is made.”

“In view of the overall circumstances, it is difficult to characterize such an act as a threat,” it said.

Financial authorities believe Hana's win will have a positive effect on the ISDS.