Korea Herald 2015-05-04
Controversy flares over ex-KEB chief’s new role with Lone Star’s law firm
Controversy rises as U.S. buyout fund seeks huge compensation
A former top financial official who advocated for Korea Exchange Bank’s breakaway from Lone Star has taken up a position in a law firm that represents the U.S. buyout firm.
His move comes at a time when the South Korean government faces an impending international lawsuit from Lone Star, which demands 5 trillion won ($4.6 billion) in compensation.
Shin and Kim, one of the nation’s top five law firms, said Sunday it scouted former KEB president Yun Yong-ro as a senior adviser, specializing in the merger and acquisition of financial institutions and financial disputes.
Yun’s new position is legally allowed, but it has triggered controversy about a conflict of interest as the company represents Lone Star in the suit against the Korean government.
The U.S. private equity fund filed an Investor-State Dispute settlement suit in 2012 for a claimed amount of 5.13 trillion won, arguing that the Korean government had caused financial damage by delaying its approval for the KEB deal.
The first hearing is scheduled to be held in the International Center for Settlement of Investment Disputes in Washington on May 15.
Yun was a key player in the years-long dispute between KEB and its onetime owner Lone Star, and many observers suspect his new position could influence the upcoming court case.
The former bank chief has denied the allegations.
“I was aware that Shin and Kim represented Lone Star, but I am in no way involved in the ISD process, nor have I been requested to look into the issue,” he said.
“It is regretful that I should be caught up in such controversy, after working for years to clear up the vestiges of Lone Star and to normalize the bank’s management.”
Yun served as KEB president from 2012-2014 and as financial services commission vice chairman in 2007.
He was the first chief to take office after Lone Star sold KEB to Hana Financial Group and had repeatedly stressed the need to “clean up the vestiges of Lone Star” during his two-year term.
By Bae Hyun-jung (firstname.lastname@example.org)