Former People Power Party leader Han Dong-hoon on the 18th cautioned against credit-taking over the government's win in the annulment request in the investor-state dispute settlement (ISDS) case between U.S.-based private equity fund (PEF) Lone Star and the Korean government, saying, "The Democratic Party of Korea administration should not try to jump on the bandwagon belatedly."
When the decision came down in 2022 ordering partial damages to Lone Star, Han, who was then the Justice Minister, led the push for an annulment request despite concerns in some quarters.
Soon after news broke that the Korean government had won that day, Han posted on Facebook, "Lone Star lawsuit, victory for the Republic of Korea!" Twenty-six minutes later, he posted again, saying, "In Sept. 2022, when I was Justice Minister, as we pursued the Lone Star ISDS case that we won today, the Democratic Party of Korea nitpicked issues such as the likelihood of victory and strongly opposed it," adding, "I am grateful to the public for trusting and waiting."
On the same day, Justice Minister Jung Sung-ho said at the briefing announcing the victory, "Some may say this was done even before the new administration was launched, but I see this not as an issue of any particular administration. After last year's insurrection, with no president and no Justice Minister in place, the director-general of the International Legal Affairs Bureau at the Ministry of Justice and the staff in charge devoted their utmost efforts."
Aiming at that, Han sharpened his criticism, saying, "I am grateful to the public officials, including the Ministry of Justice, who did their utmost for the national interest of the Republic of Korea despite the Democratic Party of Korea's nitpicking and opposition," and, "The Democratic Party of Korea administration should not try to jump on the bandwagon belatedly and should apologize to the public for nitpicking and opposing this lawsuit at the time."
Lone Star acquired Korea Exchange Bank in 2003 for about 1.4 trillion won and sold it to Hana Financial in 2012, earning about 4.7 trillion won (including dividends). During this process, controversy arose over whether Lone Star, which qualified as industrial capital (a non-financial controlling shareholder), was eligible to own Korea Exchange Bank. In 2006, the Board of Audit and Inspection announced that Korea Exchange Bank had been inappropriately sold to Lone Star, which lacked eligibility to acquire it, resulting in a "fire sale."
In Nov. 2012, Lone Star filed for international arbitration through ISDS, claiming it suffered $4,679.5 million in damages due to the Korean government's improper intervention in the sale process of Korea Exchange Bank. Lone Star argued that, during the sale process, financial authorities intentionally delayed approval of the sale and interfered improperly by lowering the sale price. It also said the National Tax Service applied arbitrary criteria in imposing taxes.
In Aug. 2022, 10 years after the arbitration was initiated, the tribunal partially upheld Lone Star's claims and ordered the Korean government to pay $216.5 million (about 289 billion won), or 4.6% of the claimed damages. Objecting to the decision as the compensation amount was small, Lone Star sought relief, and Han Dong-hoon, then Justice Minister, also said it was "worth fighting to the end" and filed for annulment. At the time of the annulment request, the opposition, including the Democratic Party of Korea, criticized the decision, saying "the chances of winning are low and only the interest on compensation may grow."