Wonderful Bloomberg Reporting on Lone Star
by Brendon Carr
Bloomberg today has a wonderful in-depth piece on the history of the Lone Star investment and imbroglio. It’s the best piece of reporting so far in respect of this matter, and well worth your time.
One key point in the article is how in 2002 Lone Star was the last chance for Korea Exchange Bank:
Korea Exchange Bank had already been rebuffed by Bank One Corp., BNP Paribas SA, Citigroup Inc., Credit Suisse First Boston, HSBC Holdings Plc, JPMorgan Chase & Co., Newbridge Capital LLC and Standard Chartered Plc, according to a Morgan Stanley memorandum dated June 23, 2003, a copy of which was included in documents submitted to the National Assembly’s Finance and Economy Committee for a parliamentary investigation in 2004.
No good deed goes unpunished.
This article also mentions the most important point: Our firm Hwang Mok Park is defending Lone Star in the myriad and endless criminal prosecutions. Senior partner Hwang Ju Myung was interviewed by the Bloomberg reporter at length, but as always the story tends to gloss over the fascinating and heroic lawyers and all the interesting legal nuances.
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Great article, Brendon. Thanks for posting it.
It is a good article, and I have just one initial reaction to Grayken’s last quote about remaining interested in Korea. I don’t pretend to know what’s really in the man’s mind, but given all the circumstances I expect that this is nothing more than precatory posturing (not that it will do LS any good). I’ve recently had dealings with a half-dozen private equity houses from the US and Europe in connection with a project in Korea to which all granted investment approval on all grounds ex location/country risk. All ultimately passed on the opportunity for the explicit reason that they did not want to commit funds to Korea because of the perceived discriminatory and fickle nature of the regulatory and legal environment—i.e, that it’s the scope of the country risk that was in issue, not geopolitical security concerns. This included several firms that previously have invested in Korea (and say they have learned their lesson), some of which still have funds at work here (but which they are working to reduce).
Thanks for dropping by Korea Law Blog, Sperwer.
I don’t know what’s in the Mr. Grayken’s mind either (due to conflict-of-interest problems, I’m not on the Lone Star team here), but one possible benefit of the Roh government chasing off so many would-be foreign investors is the low level of foreign-investor interest.
If you thought it was hard to get foreign investors interested in Korea Exchange Bank (see all those banks which turned it down above), imagine how little competition there will be for deals in the future!
That’s the glass-is-half-full perspective, anyway.