Friday, February 28, 2020
Hana Financial Group Wins Damage Suits Filed by Lone Star Funds
ICC Arbitration Court Sides with Hana Financial Group
Hana Financial Group Wins Damage Suits Filed by Lone Star Funds
  • By Michael Herh
  • May 16, 2019, 09:38
Share articles

Hana Financial Group has won the damage suits filed by Lone Star Funds with the International Court of Arbitration of the International Chamber of Commerce (ICC).

Hana Financial Group announced on May 15 that it has won every damage suit Lone Star Funds filed with the International Court of Arbitration under the International Chamber of Commerce (ICC). The group does not have to pay 1.6 trillion won claimed by the American private equity firm.

Earlier, Lone Star applied for arbitration by the court in August 2016, claiming that Hana Financial Group excessively lowered the price of Korea Exchange Bank (KEB) in acquiring the bank from it. Three arbitrators recommended by the ICC, Lone Star and Hana Financial Group sent their statement to the ICC on April 16 this year.

The ICC examined the statement for three weeks and recently approved it. The statement was sent back to the three arbitrators and they signed it and sent it to Hana Financial Group and Lone Star.

The result of the arbitration is expected to affect the ongoing investor-state dispute (ISD) between Lone Star and the South Korean government, which is likely to come to a conclusion in the first half of this year. Lone Star is currently claiming that the government conducted discriminatory taxation, yet the government is likely to win the case with the result of the arbitration in favor of the group.

This is because the recent lawsuit between Hana Financial Group and the private equity firm was on the premise that the South Korean government delayed the sale procedure and conducted discriminatory taxation during the sale of KEB to the group. Lone Star filed the ISD in November 2012, claiming the government’s arbitrary taxation in May 2012 led to 5.2 trillion won in losses during its investment exit from the bank. The South Korean government claimed in response that it observed international laws and treaties.