The 13-year legal battle with the U.S.-based private equity fund Lone Star has ended in a victory for the Korean government. Prime Minister Kim Min-seok gave a briefing at Government Complex Seoul on the 18th, saying it was "a feat achieved by the new government in the external institutional sector." Minister Jung Sung-ho also said, "After the Dec. 3 insurrection last year, with the president and the justice minister impeached and absent, the staff, including the Director General of the Ministry of Justice's International Legal Affairs Bureau, gave their all."
But the opposition bloc points out that the Democratic Party of Korea opposed the lawsuit three years ago. In Aug. 2022, when then-Justice Minister Han Dong-hoon said he would pursue additional litigation by challenging the International Centre for Settlement of Investment Disputes (ICSID) partial damages award, Democratic Party figures criticized the former minister.
◇Government says "victory over Lone Star is a feat of the new government"… Democratic Party criticized the suit three years ago
At the time, Democratic Party lawmaker Park Yong-jin said, "The Ministry of Justice spent more than 40 billion won on law firms through litigation," calling it "an administrative act that only fattened the law firms." Song Ki-ho, who now serves as the presidential office's secretary for economic security in the Lee Jae-myung government, also said then, "In the ICSID annulment procedure, the possibility that a legal conclusion will be reached by award that the Korean government bears no liability is 'zero (0),'" adding, "Minister Han Dong-hoon's explanation misleads the public." Song is a figure who served as chair of the international trade committee at Lawyers for a Democratic Society (Minbyun) and even ran in the 2024 general election as a Democratic Party candidate.
Had the ICSID partial damages award been accepted in 2022 as the Democratic Party argued, there would have been no victory this time. People Power Party senior spokesperson Park Sung-hoon said, "The Democratic Party has fiercely condemned the previous government's response to push forward with the lawsuit, saying 'there is no chance of winning,' 'annulment is impossible,' and 'only legal costs will grow,'" adding, "Those same people are now packaging it as their own achievement. The Democratic Party's attempt to usurp credit for the victory is beyond brazen and truly shameful."
Park, the senior spokesperson, said, "Had we done as the Democratic Party demanded, the Republic of Korea would have had to pay 400 billion won to Lone Star today," adding, "Acknowledge first the wrongdoing of condemning the lawsuit and denying the possibilities, and apologize to the public."
The Democratic Party's negative stance toward suing Lone Star appears to stem from the fact that the roots of this case touch the Kim Dae-jung and Roh Moo-hyun administrations. Lone Star bought a 51% equity stake in Korea Exchange Bank in 2003 for 1.3834 trillion won, then sold it back to Hana Bank in Jan. 2012, nine years later. Over nine years, Lone Star's revenue from Korea Exchange Bank through dividends and sale gains alone amounted to 4.7 trillion won. The very decision to sell Korea Exchange Bank to Lone Star, which was unqualified to be a bank's major shareholder, was made during the Kim Dae-jung and Roh Moo-hyun administrations.
◇Han Dong-hoon led the Lone Star litigation as minister… "Baffling that the Democratic Party opposed it and now flatters itself"
With this victory, former leader Han Dong-hoon is back in the spotlight. As justice minister, Han led the ICSDI annulment suit, and before that, directly investigated Lone Star's Korea Exchange Bank stock manipulation case, the only Lone Star criminal case to result in a conviction.
Minister Jung Sung-ho, in a briefing the previous day, singled out Director General Jung Hong-sik of the Ministry of Justice's International Legal Affairs Bureau, saying he "worked tremendously hard," and it was also during Han's tenure as minister that the International Legal Affairs Bureau was created. Director General Jung was appointed in Feb. last year during former Minister Park Sung-jae's term, under the Yoon Suk-yeol administration.
Appearing on SBS radio that day, the former leader said, "When we said we would file this suit, the Democratic Party insisted there was no chance and hounded me, asking if I would pay the interest if it grew," adding, "After hounding us so persistently, seeing them now flatter themselves left me baffled."
Han added, "A person like Song Ki-ho, who opposed the annulment suit, is now the secretary for economic security," and said, "It's frightening to think people without real competence are deciding and manipulating the country's future."