South Korea has been ordered to pay $216.5mn plus interest to Lone Star Funds, in a ruling that is expected to bring to an end the 20-year saga of the Texan private equity group’s acquisition of Korea Exchange Bank.
The International Centre for Settlement of Investment Disputes, a World Bank arbitration tribunal based in Washington, awarded damages amounting to just 4.6 per cent of the $4.68bn Lone Star had sought in compensation for delays in the disposal of its Korean investments.
Lone Star initiated the international arbitration in 2012, claiming that the fund’s investors suffered huge losses because of the Korean government’s “unlawful interference with Lone Star’s rights as the major shareholder of KEB and other Korean companies Lone Star acquired in the early 2000s”.