Korea sold KEB's control to Lone Star in 2003; the bank passed to Hana by 2012

Korea Exchange Bank had been bailed out and consolidated after the 1997 Asian financial crisis, leaving the state as its dominant shareholder. In 2003 the government made the then-radical decision to sell control: Lone Star Funds bought a 50.5% stake for 1.4 trillion won (US$1.2 billion), the first time a foreign private-equity firm took over a major South Korean bank.

Under private ownership KEB was run for value rather than policy. When Lone Star decided to exit, it agreed to sell its controlling stake to Hana Financial Group for about 4.7 trillion won; regulatory approval dragged for over a year and the deal only closed in 2012, turning a crisis-era state salvage into a strategic domestic merger.

The exit was not clean: Lone Star faced a stock-manipulation trial over its dealings and later international arbitration with Seoul over the delayed approval. Korean courts eventually cleared the fund of wrongdoing, but the dispute chilled foreign private-equity appetite for Korean financial assets for years.

US$1.2bn for 50.5% in 2003; control passed to Hana Financial in 2012, completing KEB's privatisation cycle

KEB was state-dominated after 1997 bailouts, and Seoul needed both capital and credibility.

A single controlling owner replaced diffused public stewardship.

Regulatory delay on the Hana sale showed how politics, not price, set the exit timetable.

The courtroom clearances came too late to spare Korea's reputation cost with foreign investors.

Selling a rescued state bank outright to a committed private owner — even a foreign fund — ends limbo faster than years of public stewardship.

Lone Star completed the sale of its controlling KEB stake to Hana Financial Group in 2012, and Hana later merged KEB into what is now Hana Bank. Courts cleared Lone Star of stock-manipulation charges in 2013. The case remains the reference point for both the promise and the political risk of foreign ownership in Korean banking.