Korea: Peregrine's shotgun wedding
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Korea: Peregrine's shotgun wedding

When high-flying Hong Kong investment bank Peregrine decided to set up a joint venture in South Korea six years ago, its partner must have seemed an excellent choice. A medium-sized conglomerate, the Dongbang group was a reasonably well focused business, the leading maker of cooking oil, a producer of food materials and owner of a restaurant chain. Inexperienced in investment banking, it was not likely to interfere in the day-to-day running of the business.

It was also very well connected, always helpful in a country like Korea. The daughter of the Dongbang chairman was married to the son of South Korea's then president, former-general Roh Tae Woo. Under the carefully structured joint-venture agreement, Peregrine held a 44% stake but gained effective management control as it was the largest single shareholder. It hired the staff and did the deals.

The company was profitable from year one. As one of the few foreign houses with a seat on the Korea Stock Exchange, Dongbang Peregrine attracted considerable business. It won awards for its equity research and was voted best investment bank in Korea in a 1995 Euromoney poll.

Not that the house did a lot of investment banking.

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