Appellate court clears charges in sale of KEB to Lone Star

SEOUL, Dec. 29 (Yonhap) -- A Seoul appellate court on Tuesday upheld a lower
court's ruling that the 2003 sale of Korea Exchange Bank (KEB) to U.S. equity
firm Lone Star Fund was not conducted at a below-market price, a verdict that
cleared government and banking officials involved in the sale of breach of trust
charges.
Lone Star paid US$1.2 billion in 2003 to take over KEB, then Korea's
fifth-largest lender and plagued at the time by the aftermath of the 1997 Asian
financial crisis.
Prosecutors have said that the price was up to 825.2 billion won (US$705 million)
lower than its market value and accused a finance ministry director, Byeon
Yang-ho, of conspiring with the bank's then chief Lee Kang-won and vice chief Lee
Dal-yong to artificially understate the lender's value.
The Seoul High Court upheld a Seoul district court's ruling which dismissed the
breach of trust charges against Byeon and the two former KEB executives. The
lower court said at the time of its ruling that while there were "some
inappropriate acts in the sale process, strictly speaking we found no evidence of
acts or intention linked to a breach of trust."
brk@yna.co.kr
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