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SEOUL - Lone Star Fund's co-founder Ellis Short faces an extradition request by South Korean prosecutors after a Seoul court issued a warrant seeking his detention over the buyout firm's management of the nation's fifth-largest bank.
The Seoul Central District Court yesterday issued warrants against Short and the Dallas-based firm's general counsel, Michael Thomson.
"We have judged the applications meet the conditions needed to seek extradition of criminals," it said.
"We have offered repeatedly to come to Korea for questioning, as long as we are allowed to leave," Short said in an e-mailed statement.
"It is up to the prosecutors to decide whether they really want to determine the truth in this investigation, or simply want to try to intimidate us."
An extradition request might deter overseas companies in Asia's third-biggest economy, where foreign direct investment has fallen to a 26-year low.
Prosecutors are investigating Lone Star's acquisition and management of Korea Exchange Bank, stalling an agreement to sell the firm for a US$4 billion ($6 billion) profit.
"This issue of nationalism has been around for some time in South Korea," said political risk consultant Bruce Gale. "I wonder whether countries can afford to continue doing this sort of thing when they face increasing investment competition."
- BLOOMBERG
