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Wuh-oh. Looks like downtown Dallas-based Lone Star Funds, a powerful international investment firm (to the tune of $13 billion, which I think is a lot), is in some kinda big trouble in South Korea. Something to do with tax evasion, embezzlement and “other allegations,” which cannot be good. Apparently, South Korean prosecutors, who raided the company today, are looking to extradite Steven Lee, a former fund exec they think is hiding in the States. According to the International Herald Tribune:
“Lone Star, based in Dallas, has become a focal point of growing public discontent with foreign funds. Those sentiments were heightened after it was reported last week that the fund stood to gain more than $4 billion from its two-and-a-half-year investment in Korea Exchange Bank but will likely pay no taxes to local authorities because its investment was conducted through a tax haven.”
Just how big a deal is this, anyway? Well, according to this site, Lone Star Funds is the largest shareholder of Korea Exchange Bank, which is among that country’s largest financial institutions. Gee, who knew South Korea’s banking was being done out of an office on Harwood Street? –Robert Wilonsky
