Brookfield assets in Korea seized: reports

Assets of Brookfield Asset Management were reportedly seized due to its delayed payment of the refund it owes Mirae Asset Global Investments for the collapsed sale of the International Finance Center (IFC) in Seoul.

Domestic media outlets reported this week that Mirae Asset initiated asset-seizure proceedings, and the measure has already gone into effect.

They reported that Mirae Asset has filed a provisional attachment request with the Seoul Southern District Court, which approved the action. The order took effect on Nov. 18.

The assets subject to attachment are known to be four Singapore-based special purpose companies (SPCs) owned by Brookfield that hold IFC-related assets, excluding the hotel business, the reports said.

Under the court’s decision, Brookfield is prohibited from disposing of the shares held by these SPCs, distributing dividends or profits, returning capital, or receiving any economic benefit generated from the shares, the reports noted.

Mirae Asset’s move stems from Brookfield’s failure to return the down payment for the aborted IFC transaction after the Singapore International Arbitration Center (SIAC) had ruled in favor of Mirae Asset in a three-year arbitration case last month.

As a result, Brookfield was ordered to return the full deposit amounting to 200 billion won ($140 million) and pay additional interest and arbitration-related costs.

The dispute traces back to Brookfield’s effort to unload the IFC complex in Seoul’s financial district.

After buying the property from AIG in 2016 for roughly 2.55 trillion won ($1.8 billion), the Canadian asset manager attempted to sell the landmark development but struggled to finalize a deal with potential investors.

Mirae Asset emerged as the leading suitor during the sales process and, in May 2022, entered into an MOU to purchase the IFC for about 4.1 trillion won ($2.9 billion).

To secure its position, Mirae Asset transferred a 200 billion won ($140 million) deposit, with plans to raise around 700 billion won ($490 million) of the acquisition funds through its publicly listed REIT.

That financing plan, however, unraveled when the South Korean government rejected the REIT’s business license, effectively sinking the transaction.

Once the deal collapsed, Mirae Asset sought the return of its full deposit, but Brookfield refused, contending that Mirae Asset had not exercised “best efforts” to obtain regulatory approval.

The Korean investment firm then initiated arbitration proceedings with the SIAC in Sept. 2022, and the tribunal ultimately sided with Mirae Asset.

Mirae Asset declined to comment when reached for this article. Comments from Brookfield were not available.