Korean Barbecue

At the end of March, we reported about how downtown Dallas-based Lone Star Funds, a powerful international investment firm and equity fund, landed in some kinda big trouble in South Korea. There were myriad allegations of tax evasion and embezzlement and other dirty deeds to the tune of a few...

By Robert Wilonsky

May 10, 2006

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At the end of March, we reported about how downtown Dallas-based Lone Star Funds, a powerful international investment firm and equity fund, landed in some kinda big trouble in South Korea. There were myriad allegations of tax evasion and embezzlement and other dirty deeds to the tune of a few billion. Three weeks ago, Lone Star Funds offered to make it up to the South Korean government by offering up more than $100 million in charitable donations--one hell of a bribe, and, of course, all for a good cause. Well, that didn't satisfy the South Korean government: Yesterday, Lone Star's head of operations there, Yoo Hoe-won, was arrested and charged with misappropriation of funds. Writes Andrew Salmon:

"The prosecution said the arrest signals the beginning of full-scale investigations into Lone Star's 2003 acquisition of Korea Exchange Bank. The allegations, which also include tax evasion, have already prompted the arrest of two former Lone Star Korea executives. Lone Star has also been raided by various government agencies and lambasted in the media."

The Dallas Morning News hasn't written a word about Lone Star Funds since January, when it celebrated the firm for "quietly playing spark plug in the struggle to get the German economy moving." The paper also referred to Lone Star Fund as "a publicity-shy firm"--well, no wonder. --Robert Wilonsky

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