SEOUL, KOREA - Kumho Asiana Group and private equity fund firms are clashing with each other over Kumho Buslines, the long-distance bus operator. The private equity firms are claiming that Kumho Asiana secretly pressured potential bidders to drop out of the race and consequently reduced the value of Kumho Buslines. This is essentially the conflict between Kumho Asiana that wants to buy back the unit at lower price and private equity firms that try to sell it as dearly as possible.

 

The controversy erupted when the consortium of KStone Partners and IBK Investment & Securities, the largest shareholder of Kumho Buslines, sent an official letter to Kumho Asiana titled "Our Position on Kumho Asiana's Obstruction to Sell Kumho Buslines." In this letter the consortium members accused, "Despite the 2012 agreement of no obstruction at the time of buyback, the current senior manager of personnel and other managers have organized a union to put pressure on potential bidders not to take part in the bidding while the group's executives are doing the same."

 

Indeed, a foreign private equity firm showed its intention not to bid for the deal out of concern that its participation might cause labor strife. To this, Kumho Asiana Group countered that it was pure fabrication to tarnish the group's reputation and thereby gain from the Kumho Buslines deal.