The chairman of US equity fund Lone Star has arrived in South Korea where he is expected to testify in court and face separate questioning over allegations of fraud, officials said Thursday.
John Grayken arrived late Wednesday amid allegations against Lone Star it had fraudulently acquired a controlling stake in South Korea's fifth largest bank, Korea Exchange Bank (KEB), at a bargain price. Prosecutors said Grayken's lawyers had agreed he would present himself to authorities for questioning after his scheduled testimony in a separate court case on behalf of a colleague which is due to start Friday.
"Chairman Grayken will certainly be subject to questioning in accordance with domestic laws here," Spokesman Kim Kyung-Soo of the Prosecutor General's Office told AFP.
Prosecutors allege Lone Star conspired with government and KEB officials to acquire the South Korean bank at below market prices but Grayken maintains prosecutors have "no actual facts" to support their assertion. Grayken also said he would take the witness stand for the defence in the trial of Paul Yoo, the head of Lone Star's Seoul subsidiary.
Yoo was indicted in January last year on charges of manipulating stock prices of KEB's credit card unit. "I'm here voluntarily at the request of the lawyers defending for Yoo to testify on his behalf at the trial," he told YTN television.
Lone Star wants to sell its 51.02 percent KEB holding to global banking giant HSBC but South Korea's financial watchdog says it won't approve the 6.3-billion-dollar deal until legal cases over its previous sale are settled.