There can be no bargaining over retracing the whole process by which the Korea Exchange Bank (KEB) ended up with Lone Star and in taking appropriate action in response to whatever is discovered as a result. Lone Star says it is going to donate W100 billion of the W4.5 trillion it will earn from the sale of KEB to social causes, and as a sign that it is prepared to pay any taxes is will be required to pay, it is willing to put as much as W725 billion in escrow with a Korean bank until the controversy is laid to rest. If Lone Star's vice president sent a fax outlining such intentions to Deputy Prime Minister for Finance and Economy Han Duck Soo out of a calculated attempt to turn the situation around, the only conclusion you can make is that Lone Star does not take the Korean government and the Korean people seriously.
One can guess why Lone Star suddenly wants to put potential tax money in escrow, having earlier made clear its intention to avoid paying taxes. Is not its intention to have the sale of KEB move along without any setbacks? It's not like the authorities would let it leave even with money to be paid in taxes and whether or not it has to pay is something that will be figured out in court, so it's not as if the money in escrow would be
However, this is more than an issue of taxation. Currently the situation is such that the 2003 decision to sell KEB to Lone Star could be declared null and void. The resale of KEB by Lone Star should be held off until the issues are resolved anyway. Either Kookmin Bank, which is engaged in negotiations to buy KEB, should postpone the purchase, or the government should delay approval in order to avoid problems at a later date.
It feels distasteful to have Lone Star saying it will make a donation to social causes now that its actions have become a problem. Korea has one of the world's top ten economies, and you have to ask if Lone Star thinks the country needs to beg. It has made a huge mistake if it was "benchmarking" against Newbridge Capital's decision to donate W20 billion to social causes after it sold Korea First Bank or the way certain jaebeols try to overcome difficult situations, such inheritance among members of their owning families, also with financial donations. What Lone Star needs to be doing right now is to cooperate with the prosecution's investigation and the Board of Audit and Inspection's audit and then wait for the results.
The Hankyoreh, 18 April 2006.
[Translations by Seoul Selection]
[Editorial] Lone Star Mocks Korean Gov't, People? |
