By Park Si-soo
Staff Reporter
The prosecution Thursday extended the overseas travel ban imposed on John Grayken, chairman of Lone Star Funds, to 10 days for further questioning over alleged irregularities involving the fund's acquisition of the Korea Exchange Bank back in 2003.
The head of Texas, Dallas-based private equity firm, who arrived here on Jan. 9, will be prohibited from leaving the country until Jan. 29.
The chairman has appeared everyday at the Seoul District Prosecutors' Office in Seocho-dong, southern Seoul, since Monday and has undergone a 12-hour-long questioning each day.
He left the prosecutors' Office around 10:30 p.m. on Wednesday looking extremely exhausted.
``It is still too early to consider Grayken's criminal punishment. We're still in the early stage of the investigation,'' Song Hae-eun, a prosecutor in charge, told reporters.
Meanwhile, prosecutors sought a 10-year prison sentence Wednesday during the trial of the head of Lone Star's Seoul office, Paul Yoo, for alleged stock price manipulation and spreading false rumors of a capital reduction of KEB, a prosecutor said.
Prosecutors also asked for a fine of 4.2 billion won for the Korean representative.
Yoo was indicted last year along with Lone Star for allegedly rigging the stock price of KEB's credit card unit.
The Lone Star chairman denied the allegations last week when he took the stand as a defense witness for his Korean business partner Yoo.
Lone Star bought a 50.5 percent stake in KEB in 2003 and later increased its holdings to 64.6 percent. Between these deals, the credit card firm was merged with the bank, resulting in about 22.6 billion won ($24.4 million) in losses for minor shareholders.
In June last year, Lone Star sold a 13.6 percent stake in KEB, but it still holds 51.02 percent of shares in the bank.
Lone Star has cancelled its attempts to sell the full stake, as the Financial Supervisory Commission refused to approve a deal until all legal problems are cleared up. In its latest move in September, Lone Star signed a $6.3 billion contract with London-based HSBC Holdings to sell its stake by April.