Lone Star May Be Forced To Sell KDB Shares

SEOUL (Reuters) – South Korea's top financial regulator said on Tuesday it may consider fining U.S. investment firm Lone Star LS.UL after it failed to submit regulatory documents, and that may result in an order to sell shares in Korea Exchange Bank (004940.KS: Quote, Profile, Research, Stock Buzz).

“Financial authorities in February asked Lone Star to submit supplementary documents as we were in the process of reviewing whether Lone Star is a qualified top shareholder (in a domestic bank),” an unnamed senior official of the Financial Services Commission said in a statement.

“But Lone Star had not handed in documents by a new deadline of August 31 and asked us to postpone the deadline. Now that Lone Star has not accepted our request, we will proceed with relevant procedures by considering imposing a fine under the banking law.”

Lone Star holds 51 percent of KEB, a local bank for which global banking giant HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) has offered $6.3 billion for a majority stake.

(Reporting by Kim Yeon-hee; Editing by Keiron Henderson)