The Han Dong-hoon Story

PART 03 Lone Star: Han Dong-hoon Who Protected 6 Trillion Won in National Interests · Original Text 01

One late night in 2006.

The lights were on in the windows of the seventh floor of the Central Investigation Division of the Supreme Prosecutors Office in Seocho-dong. Seoul's dazzling nightscape glimmered against the glass, but the thirty-three-year-old prosecutor in the office had no time to notice it.

On the desk lay stacks of documents totaling tens of thousands of pages. Cold instant coffee cups filled the trash can. Prosecutor Han Dong-hoon spent the night wrestling with figures, highlighter in hand.

The case he was investigating was 'Lone Star.'

The massive private equity fund headquartered in Texas, USA, acquired Korea Exchange Bank for 1.3834 trillion won in 2003. In the days when the scars of the foreign exchange crisis had not yet healed, the government had to quickly sell off the ailing Korea Exchange Bank, and Lone Star seized that opportunity.

The problem came next.

As Lone Star merged Korea Exchange Bank with Korea Exchange Card, to cut merger costs it spread rumors of capital reduction in the market. Capital reduction causes share prices to fall. Terrified investors dumped Korea Exchange Card shares, and the stock price collapsed. Lone Star then merged Korea Exchange Card at a pittance based on those depressed stock prices.

Everyone could see it coming. But no one could easily prove it. Lone Star could simply claim it was a business decision and that the capital reduction plan was withdrawn later.

They had the world's best legal advisers, and their logic seemed impenetrable. The materials from the Financial Supervisory Service contained only suspicious circumstances, with no decisive evidence to prove guilt in court.

Prosecutor Han Dong-hoon had just completed the Hyundai Motor Group investigation and was preparing to return to his assigned office. His superiors entrusted him with another task. He took on the Lone Star case alongside fellow prosecutor Lee Dong-yeol, who would later become the head of Seoul Western District Prosecutors Office.

When he first received the case file, he felt despair. He had circumstantial suspicion but no physical evidence.

But Han Dong-hoon did not back down. He had intuition.

'No matter how complex the packaging, a crime is a crime.

I cannot let someone who did wrong benefit from it.'

He slept in the prosecutors office five days a week.

He would cover himself with newspapers on the sofa, sleep, wake at dawn, and go through the files again. No one asked him to do this.

It was a chosen ascetic practice.

His decisive move was a search and seizure at Citigroup (then Salomon Smith Barney), Lone Star's adviser.

A compulsory investigation into a foreign investment bank was a taboo at the time.

His superiors, concerned about diplomatic friction, urged caution. Some voices warned that touching this could bring international embarrassment.

But Han Dong-hoon convinced the court. The warrant was issued.

And that dawn, in tens of thousands of seized emails, Han Dong-hoon finally found the smoking gun.

At the very moment Lone Star announced the capital reduction plan, an email exchanged between staff contained this sentence:

"Capital reduction is off the table."

'Capital reduction is not on the table.'

Outwardly creating panic in the market by appearing to review capital reduction while internally having already abandoned the plan, it was clear evidence of intentional false information dissemination,stock price manipulation.

Han Dong-hoon recalls that moment like this:

"I wanted to show justice against their arrogance in taking Korea lightly." Based on this evidence, he continued his relentless investigation. He summoned foreign executives and extracted confessions through logical questioning.

But it was not easy.

The court rejected the arrest warrant for Lone Star Korea CEO Paul Yu four times. Invisible tension between the judiciary and the prosecution, hints of outside pressure coming from somewhere. Yet he did not give up.

The trial proceeded over ten years.

Even after receiving a transfer order to the Busan District Prosecutors Office, Han Dong-hoon returned to Seoul twice a week to attend court proceedings. For him, this case was not mere work. It was a matter of Korea's pride.

In 2011, the Supreme Court finally confirmed Lone Star's guilt on stock price manipulation charges. The CEO was sentenced to three years in prison.

This verdict was not simply the punishment of one criminal.

It was a historic moment when Korea's judiciary officially confirmed that Lone Star was immoral capital that committed crimes.

That night, Prosecutor Han Dong-hoon likely sighed with relief as he packed away his belongings. But no one knew at the time.

That one guilty verdict Han Dong-hoon uncovered and obtained would become the sole weapon to save Korea from an astronomical 6 trillion won lawsuit twenty years later.

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