Korea Telecom Corporation, the former Korea government-owned telecommunications business, has launched a real estate management firm to manage its $5.4 billion of real estate assets and has appointed a former Lone Star executive to run it.
According to a report by Reuters, KT Corp has appointed Kim Kyung-soo, who previously worked for the Korea business of the Dallas-based private equity and real estate giant.
He will be charged with growing the revenue making capabilities of the company’s real estate assets. The report said KT Corp’s assets generated 145 billion won (€93 million; $124 million) of revenue in the first half of this year from rents and developments.
KT Corp was spun out of the Korean government’s Ministry of Communications in 1981. At the time it managed 4.5 million telephone lines. It grew to 20 million lines within 12 years. In 1997, it expanded its operations to include mobile communications as its main business.
Lone Star, meanwhile, has had a troubled time with its Korea exposure and this continued when yesterday it was reported to have had its request turned down for the repayment of a large amount of tax paid in 2007 in return for its sale of its stake in Korea Exchange Bank (KEB).
Yonhap News reported that Lone Star had petitioned for a refund of approximately $100m paid to the National Tax Service from selling an approximately 13.6 percent in the bank. Its petition was refused on the grounds that the Belgium-based company set up by Lone Star to make the investment in the bank was “merely a pass-through” company where there was no evidence of actual investment activities and so did not warrant benefiting from a tax exemption treaty between Belgium and Korea.
Lone Star has encountered numerous problems with its investment in KEB which began in 2003 including allegations of artificially deflating the bank’s stock price before buying it and embezzlement by one its employees.