Wednesday, October 5, 2005


HatTip to Jeff. I guess this is a follow up to my op-ed, which got great traffic on OhMyNews and probably a watchful eye from the KCIA:) Anyway, Asian Private Equity News's Jerry Borrell comments:

Meantime, Korean regulators were at it again. After driving firms such as Hermes and Sovereign out of the country (I exaggerate for effect), Korean authorities are taking on some of the top PE firms in the U.S.., some of whom marched in to save the country’s ailing financial companies in the late ‘90s after Korean chaebols left themselves and nearly the entire country in a default in ’97 and ’98. The Koreans have made it clear that they’re going to penalize US PE firms for using the laws on the books that allowed them to protect their earning through the use of offshore tax shelters. And we’re not just talking penalties. Korean authorities say they want the cases handled by the country’s criminal prosecutors, once the penalties are paid.

Talk like that makes the rough and tumble politics of India look pretty attractive, especially given the absence of regulatory backlash against the PE firms that continue to rake heaps of money out of their investments in that country. At one point last week, DFJ’s Tim Draper, subject to a bevy of lawsuits via his investments in, said at one event that the governments in the region are going to learn the hard way that the world of private equity is really competitive. If they don’t want [PE firms] in their markets, “we’ll leave for places where we’re welcome,” noting that capital is really portable. It’s little wonder that Vietnam has become the fastest-growing private equity market in Asia, as the government keeps asking for more help and then passes legislation which helps attract even more capital.

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