S.Korea prosecutors raid offices of KNOC, BofA-Merrill over Canada refiner deal

Tue May 12, 2015 9:21am EDT
 
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SEOUL May 12 (Reuters) - South Korean prosecutors raided Korea National Oil Corp (KNOC) and the local office of Bank of America Merrill Lynch on Tuesday in a probe over the state oil firm's 2009 acquisition of a Canadian refiner, two people familiar with the matter said.

South Korean authorities have been investigating loss-making overseas energy investments by state-run companies during the government of the country's previous president, Lee Myung-bak.

The raids were conducted by a total of about 30 prosecutors and included a visit to the home of former KNOC CEO Kang Young-won, KNOC spokesman Han Kwang-yeol told Reuters. At KNOC's headquarters in Ulsan, prosecutors took documents and computer disks related to the investment, Han said.

Bank of America Merrill Lynch advised KNOC on its acquisition of Harvest Operations Corp.

Officials with the Seoul prosecutors' office and a spokesman for Bank of America Merrill Lynch declined to comment.

KNOC paid C$4.07 billion ($3.38 billion) for Harvest, including C$930 million for the refining unit. KNOC said last November it had finalised a deal to sell Harvest's refining subsidiary, North Atlantic Refining Ltd, to SilverRange Financial Partners Llc for C$97.3 million.

KNOC's net losses from buying and operating the 115,000-barrel-per-day (bpd) refinery grew to C$1.48 billion due to worsening margins, it said last year.

($1 = 1.2040 Canadian dollars) (Reporting by Meeyoung Cho, Tony Munroe and Joyce Lee; Editing by Mark Potter)