SEOUL, Feb 1 (Reuters) - U.S. private equity house Lone Star
[LS.UL] will pocket a 230 billion won ($244 million) dividend
from Korea Exchange Bank (KEB) for 2007, while it awaits a South
Korean court ruling on Lone Star senior officials on Friday.
KEB said it would pay a total of 451.4 billion won in
dividends, almost half of the bank's 2007 net profit of 947.1
billion won, after reporting its fourth-quarter earnings.
[ID:nSEO86535]
For 2006, KEB (004940.KS) had paid $444.5 million in
dividends to Lone Star, the bank's first payout to shareholders
in a decade.
Dallas-based Lone Star, which owns 51 percent of the
country's No. 6 bank, initially bought a majority stake in KEB
for $1.2 billion in 2003.
The private equity fund agreed in September to sell its
shares to HSBC Holdings Plc (HSBA.L) (0005.HK) for $6.3 billion
in cash, pending regulatory approval.
Separately, the Seoul Central District Court is set to issue
at 0500 GMT on Friday the first verdict in South Korean
prosecutors' long-running legal battle with Lone Star, which is
being closely watched for its possible impact on KEB's sale.
Prosecutors have pressed for a 10-year jail term for Paul
Yoo, who leads Lone Star's South Korean operations, as well as a
4.2 billion won fine.
Yoo has been standing trial since prosecutors charged him in
late 2006 of spreading rumours to drive down the stock price of
KEB's former credit card unit so KEB could absorb the unit at
below-market prices.
Lone Star has denied any wrongdoing.
If Yoo and Lone Star are found guilty of the charges, the
investment fund would be forced to reduce its stake in KEB to 10
percent, the maximum stake a non-banking entity can own, within
the next six months under Korean laws.
That may result in the cancellation of the KEB sale to HSBC,
analysts say.
Shares of KEB rose 1.8 percent to 13,900 won by 0158 GMT,
outperforming the broader market's 0.3 percent gain.
($1=943.5 Won)
(Reporting by Kim Yeon-hee; Editing by Sei Chong)
