HSBC clears one barrier in Korea, but faces another
by Richard Kilner
HSBC has gained the South Korean Fair Trade Commission’s approval for its bid to acquire a $6.3bn stake in Korea Exchange Bank, the nation’s sixth largest bank.
However, the British bank still requires the green light from the Financial Services Commission.
The FSC has stated in the past that it would not permit the sale of KEB shares unless the issues surrounding Lone Star’s (a private equity firm) stake had been addressed.
Ku Yong-uk, a banking analyst at Daewoo Securities, has said that until the courts thrash out the matter there can be no prospect of shares being sold.
The HSBC bid is contingent upon approval from the FSC by 30 April.
However, there appears to be little chance of the deadline being met.
It was in September 2007 that HSBC and Lone Star agreed for the British bank to buy 51% of the Korea Exchange Bank.
If the deal goes through, it would allow the largest bank in Europe access to the third largest banking arena in Asia.
Sandy Flockhart, HSBC’s Asian chief executive officer, has stated that the firm has yet to decide what course of action it would embark upon should approval not be gained by the deadline.
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