South Korean prosecutors requested a local court Friday to review an earlier decision to reject the arrest of the head of Lone Star Funds' Seoul office on stock manipulation and tax evasion charges.
The move came a day after the Seoul Central District Court rejected prosecutors' fourth request to arrest Yoo Hoe-won, president of Lone Star Advisors Korea, the Seoul office of the U.S. equity fund, for his alleged leading role in the stock manipulation case.
The court granted an arrest warrant for the company's two American executives, Vice Chairman Ellis Short and General Counsel Michael Thompson, but refused to issue a warrant for Yoo, saying he is unlikely to leave the country or destroy evidence.
Yoo is in South Korea while the two American executives are living in the United States.
The Dallas, Texas-based company has been under investigation over allegations that it manipulated the stock price of the Korea Exchange Bank (KEB)'s credit card arm in November 2003 after Lone Star's takeover of South Korea's fifth largest lender.
"We sought a quasi-complaint according to Article 416 of the criminal procedure code," Chae Dong-wook, a senior prosecutor at the Supreme Prosecutors' Office, told reporters.
The prosecution plans to take the case to the Supreme Court if the complaint is turned down, he said.
Prosecutors have recently been in conflict with judges over the latter's stricter use of rules in issuing warrants than before.
Thursday's ruling on Yoo triggered fierce protests from prosecutors who believe the No. 1 man of Lone Star's Seoul office practically orchestrated the manipulation.
Prosecutors claim Lone Star spread false rumors of a capital write-down by the Korean lender's credit card unit in order to cut the fund company's purchase price for the card unit. It was merged into KEB, whose largest shareholder was Lone Star, the following year. The card company's stock price took a nose dive within a week after the rumors started, incurring about 22.6 billion won in losses to its smaller shareholders, according to investigators.
Lone Star has also been under investigation by prosecutors since March over allegations that the financial strength of KEB was deliberately underestimated to help the fund purchase a majority stake in the troubled bank at a below-market price.
Seoul, Nov. 17 (Yonhap News)
Court asked to review decision against arrest of Lone Star's Yoo |
