The following is a chronology of major events surrounding the investment dispute between South Korea and the US private equity firm Lone Star Funds over the firm’s acquisition and sale of a controlling stake in the now-defunct Korea Exchange Bank. The case culminated in a 2022 ruling by the International Center for Settlement of Investment Disputes ordering South Korea to pay $216.5 million to Lone Star. That decision was dramatically overturned on Monday.
Aug. 27, 2003 — Lone Star Funds acquires 51 percent of KEB for 1.38 trillion won (about $1.4 billion at the exchange rate at that time).
Sept. 14, 2005 — Spec Watch Korea, a civic group, files a lawsuit against the head of Lone Star and 19 South Korean officials and others, alleging documents were forged to facilitate the US company's takeover of KEB.
Jan. 12, 2006 — Lone Star announces plan to sell off KEB.
March 22, 2006 — Kookmin Bank is selected as the preferred buyer of KEB.
May 9, 2006 — Prosecutors arrest Yoo Hoe-won, head of Lone Star Advisors Korea, on suspicion of embezzlement and breach of trust.
June 14, 2006 — Byeon Yang-ho, a former head of the finance ministry's financial policy bureau, is arrested on suspicion of colluding to understate KEB's monetary value.
Nov. 23, 2006 — Lone Star pulls out of a $7.4 billion contract to sell a controlling stake in KEB to Kookmin Bank.
Dec. 7, 2006 — Prosecutors say there were illegalities in Seoul's approval of Lone Star's qualifications to buy KEB at a below-market price.
Sept. 3, 2007 — HSBC Holdings Plc announces an agreement with Lone Star to buy a 51 percent stake in KEB for $6.31 billion.
Sept. 19, 2008 — HSBC Holdings decides to terminate the KEB deal, citing falling asset values amid global financial market turmoil.
Nov. 24, 2008 — The Seoul Central District Court rules that the 2003 sale of KEB to Lone Star was an "unavoidable" decision amid the bank's financial ill-health, clearing Byeon Yang-ho and other officials of breach of trust charges.
March 10, 2010 — Lone Star announces plan to resume sale of its KEB stake.
Nov. 25, 2010 — Hana Financial Group signs a contract with Lone Star to buy its KEB stake for 3.9 trillion won.
Nov. 21, 2012 — Lone Star files investor-state dispute arbitration claims against the South Korean government for losses related to its KEB investment, demanding about $4.68 billion in compensation.
May 15-22, 2015 — The International Center for Settlement of Investment Disputes holds its first hearing on the case.
Aug. 31, 2022 — The ICSID orders the South Korean government to pay $216.5 million to Lone Star.
Oct. 15, 2022 — The South Korean government submits a request for correction to the arbitral tribunal, arguing that the interest on the damages had been double-counted and excessively calculated.
May 9, 2023 — The ICSID accepts the government's claim and corrects the principal amount of compensation to $216,018,682.
July 29, 2023 — Lone Star files an annulment application, arguing that the damages awarded are insufficient.
Sept. 1, 2023 — The South Korean government files its own annulment application, citing excess of powers, procedural violations and failure to state reasons in the arbitral award.
Dec. 16, 2023 — The ICSID orders a pause in the enforcement of the Lone Star ISDS award.
Nov. 18, 2025 — The ICSID rules in favor of the South Korean government, annulling the government’s obligation to pay damages and interest. It also orders Lone Star to reimburse the government for approximately 7.3 billion won ($4.9 million) in legal costs incurred during the annulment proceedings within 30 days.
(Yonhap and news reports)
shinjh@heraldcorp.com
