A South Korean court on Monday rejected claims that the 2003 sale of Korea Exchange Bank (KEB) to US investment firm Lone Star was illegal, a verdict that may clear a key hurdle to putting control of the bank back up for sale.
The ruling, which prosecutors will appeal, may end a long-running debate on whether KEB was sold at far below-market prices, which had been delaying Lone Star's planned sale of KEB and led HSBC to drop a $6.3 billion offer to buy 51 percent of the lender in September.
It also comes when South Korea is striving to woo foreign investors into the fourth-largest economy in Asia as major global economies are in recession and the country is bracing for the second consecutive annual trade deficit for 2009. "We cannot judge that the capital ratio estimate for KEB had been manipulated to lower the acquisition price or make Lone Star eligible to buy the bank," Yonhap news agency quoted a judge at the trial as saying. A judge representing the Seoul Central District Court's criminal trial division confirmed the ruling, but declined to be identified because he did not hand down the verdict.