Son heads the third biggest business group in South Korea

Hana Bank, to whom SK owes more money than to anyone else, has asked a US bankruptcy court to force its non-Korean rivals to hang back.

SK, still reeling from the revelation last month of a $1.2bn accounting scandal, owes about $6.5bn to Korean entities, most of which is owed to 11 groups which Hana is representing. Foreign liabilities amount to some $900m.

Hana and its fellow Korean lenders struck a deal on 18 March giving SK three months of breathing space to sell assets and take stock, but the foreign creditors - including US giant Citibank - want a payout immediately.

Old echoes

SK Global is the trading arm of the country's third biggest conglomerate, SK Group.

The scandal that blew up surrounding false accounting allegations not only echoed similar revelations in the US - not least the recent unravelling of health company HealthSouth, which US regulators accuse of having continued to fudge its numbers throughout 2001 and 2002 while the Enron-WorldCom cleanup was under way.

The SK saga also recalls the after-effects of the Asian currency crisis of 1997, which brought many of Korea's mighty chaebol, or conglomerates, to their knees.

More in store

Even if Hana wins in New York, there could still be trouble.

A favourable decision would not necessarily help elsewhere.

Back in South Korea, the Paris-based Union des Banques Arabes et Francaises is also in court, and has already sued in Singapore to wind up SK GLobal's unit there.