South Korea's central bank said Monday that it has decided not to file a lawsuit to nullify Hana Financial Group Inc.'s share-swap move, through which the banking group took full control of Korea Exchange Bank (KEB).
The Bank of Korea (BOK), which was previously the second-largest shareholder in KEB, in April exercised its right to request Hana Financial Group to buy its KEB stake because it had to sell it by law, as Hana made attempts to raise its shares in KEB to 100 percent.
But some KEB minority shareholders are seeking to lodge a lawsuit to nullify Hana's share swap, claiming that their rights as stakeholders were infringed upon in the process of Hana's takeover.
Defying pressure from civic groups to join the move by KEB minority shareholders, the BOK said in a statement that it has decided not to file such a lawsuit, given that it is unlikely to result in any practical gains.
"Instead, the BOK will focus on the current legal action to get a higher price for the KEB stake, the central bank said.
The BOK on Sept. 12 requested a local court to review whether Hana Financial paid a proper price when it acquired the BOK's stake in KEB.
Haa Financial, which bought KEB from Lone Star Funds in early 2012, acquired the BOK's 6.12 percent stake in KEB for 7,383 won (US$6.89) per share. But the central bank is incurring losses in book value after it sold its interest at a price seen as being too low.
The BOK injected capital into KEB in 1967 when the bank was established as a state-run bank.
According to the BOK, the court will either reject its request or set a fresh proper price for the deal, which could take several months.