November 20, 2006
Lone Star Feeling International Pressure
Playing in the international market can have severe ramifications for a company. Not only must they fear the US Foreign Corrupt Practices Act (FCPA), but they also have to be apprised of the law of other countries and be knowledgeable of how best to operate in these countries. And it is not always easy.
It is, therefore, not surprising to see that that Lone Star Funds is having some difficulty with South Korean prosecutors. According to the Wall Street Jrl here, they have indicted the "Dallas private-equity firm Lone Star Funds and Korea Exchange Bank on stock-manipulation charges related to the bank's credit-card unit." And it sounds like this investigation opens up an array of accusations. The Korean Herald reports here on allegations related to a judge's failure to grant an arrest warrant in 2004 for an executive of Lone Star. Part of the question here will be whether this whole investigation really is anything new from what had previously been looked at in 2004.
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