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A South Korean appeals court on Tuesday overturned a guilty verdict against U.S. private equity group Lone Star Funds, which had been accused of stock manipulation in a case that has been closely watched as a gauge of the country’s treatment of foreign investors.

Lone Star and the head of its Korean operation, Paul Yoo, were found guilty in February for manipulating stock prices ahead of the group acquiring a stake in Korea Exchange Bank. But Judge Ko Yue-young at the Seoul High Court overturned the verdict, citing insufficient evidence.

"It’s difficult to recognize that Lone Star had the intention to spread false facts or use deceptive schemes," Ko said.

The court’s ruling removed fines of $24.2 million each against Lone Star and KEB.

Yoo, who had been serving a five-year prison term, was freed Tuesday on a suspended sentence of 2 1/2 years for other minor charges, including his refusal to testify at the National Assembly.

Lone Star said it was "very gratified" with the verdict.

"We maintained our innocence throughout this process, and are pleased today to have the court’s confirmation. We hope that now we can all put this behind us and get back to business," chairman John Grayken said in a statement payday loan.

Prosecution spokesman Oh Se-in said it was not clear whether prosecutors would appeal the decision to the Supreme Court.

Dallas, Texas-based Lone Star, the bank and Yoo had been accused of conspiring to lower the share price of KEB’s credit card unit in 2003 by spreading false information.

Lone Star has battled suspicions that it was able to purchase the bank at a bargain price after colluding with government officials to understate the bank’s financial health.

The group has denied any wrongdoing and argued its rehabilitation of the once-financially strapped KEB has been good for South Korea’s economy.

Lone Star has tried to sell its stake in KEB, but had been prevented from doing so due to legal and tax disputes.

Last year, London-based HSBC announced plans to acquire Lone Star’s 51% controlling stake in KEB pending regulatory and government approval.

The watchdog Financial Services Commission said Tuesday it would not yet move ahead on procedures to allow the sale because it was not clear whether prosecutors will appeal the latest ruling. 

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