Suspended Jail Term Given to Head of Lone Star

By Bae Ji-sook

Staff Reporter

A court handed down a suspended prison term to a Korean representative of the U.S. Lone Star Funds Friday for spreading false investment information. However, it dismissed the charge of embezzlement.

Jeong Heon-ju, a representative of Hudson Advisor Korea, which manages assets acquired by Lone Star's local unit, was sentenced to two years in prison suspended for three years and fined 500 million won.

Jeong was indicted last year.

The Seoul Central District Court convicted Jeong of inflating profits to attract investors. But the judge gave a suspended sentence as the manipulation did not result in material losses for investors.

The court also dismissed charges that he embezzled US$300,000 from the Texas-based company and evaded taxes.

The Supreme Prosecutors' Office said it would appeal to a higher court.

Since its takeover of the nation's fifth largest bank KEB in 2003, the U.S. fund has been under investigation for alleged manipulation of stock prices, and lobbying regulators and policymakers. Its sale of the bank is pending approval until all court proceedings are completed.

bjs@koreatimes.co.kr