What does it cost to do deals in South Korea? For Lone StarFunds, a Dallas-based buyout firm, almost $3 billion.

Lone Star, which won control of Korea Exchange Bank in 2003 whenno local lenders were interested, spent more than five yearsentangled by courts, regulators and lawmakers as the fund incitedpublic backlash over the profits on its investment. After it wasconvicted of stock manipulation and two attempts to cash out wereundone by legal disputes, Lone Star agreed this month to sell itsmajority stake to Hana Financial Group Inc. for $3.4 billion, analmost 50 percent discount to HSBC Holdings Plc's offer in 2007,according to data compiled by Bloomberg.

While Lone Star still stands to double its money from theeight-year investment in Korea Exchange Bank, its experience willundermine the government's ability to dispose of a $3.8 billionstake in Woori Finance Holdings Co., CLSA Asia-Pacific Marketssaid. It also furthers the perception that South Korea, wherecompanies sell at a discount to the rest of Asia on concern overcorporate governance and North Korean aggression, is hostile toforeigners, Market Force Co.'s James Rooney said.