South Korea is taking a transparent and lawful stance on dealing with the ongoing legal dispute with U.S. equity fund Lone Star over its sale of a major commercial bank and other assets here years ago, Seoul's top financial regulator said Thursday.
Lone Star lodged a complaint against the South Korea government before the International Centre for Settlement of Investment Disputes in 2012, claiming that it was forced to pay unfair taxes and suffered losses due to Seoul's delay in approving a profitable deal. It demanded South Korea pay it nearly $4.68 billion in compensation.
As the case's first hearing started last week in Washington, the South Korean government dispatched a team of government officials and lawyers to cope with the case.
"The lawsuit is very important, partly because of the amount of money. And mainly because it can be a barometer of Korea's financial openness," Financial Services Commission Chairman Yim Jong-yong said in a luncheon meeting with foreign correspondents in Seoul.
"The Korean government will show that it is taking transparent and legal action in dealing with the issue. We are doing so under the principle of due process without procedural problems. This is our stance."
Lone Star had agreed to sell a controlling stake in Korea Exchange Bank to global banking giant HSBC for 5.94 trillion won ($5.4 billion) in 2007. But the contract was scrapped because the South Korean government did not give approval for the deal.
The U.S. firm sold the stake to Hana Financial Group for some 3.9 trillion won five years later.
Yim said the South Korean government had made a right decision at the time after considering various matters and surrounding conditions.
"A decision-making process in a government is very complex and complicating, taking a long time," the FSC chairman said. "We have to check which policy would cause less side effects and satisfy more people. The decision could not meet those conditions at the time."
The Seoul government is making all-out efforts to defend its arguments, he added.
A second hearing is scheduled to take place for 10 days from June 29. (Yonhap)