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July 26, 2008
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| Korea’s top financial regulator said yesterday that it will begin a review of the long-stalled bid by HSBC to buy a controlling stake in Korea Exchange Bank from Lone Star Funds. “We respect the contract made between Lone Star and HSBC,” said Kim Kwang-soo, a director at the Financial Services Commission, in a media briefing late yesterday afternoon. “We decided to start a review of whether to approve the bid by HSBC to take over KEB.” Kim said the FSC asked the British lender to provide updated documents that are necessary for the review. The review will officially begin as soon as the document arrives, Kim said. HSBC applied to buy KEB last December. It is HSBC’s third attempt to buy a Korean lender. Analysts say the $6.3 billion deal will likely be given the green light. They find few defects in Britain-based HSBC, the world’s largest lender in terms of capital. Expectations are that the FSC will approve the deal as soon as rulings come down in two pending court cases in which the legitimacy of Lone Star’s ownership of KEB is at stake. Both rulings are due in September. The change in the FSC’s attitude came after a recent intra-ministerial meeting, according to a person who attended the meeting. The person requested anonymity. The person said ministers including FSC Chairman Jun Kwang-woo and Finance Minister Kang Man-soo shared the view that “a continual delay of the review process could hurt the nation’s credibility.” Pressure from the concerned parties also seemed to have led the FSC to act. Lone Star recently conveyed a written message to the FSC that it will file a complaint against the Korean government if the review is not made. One of the pending cases involves Lone Star’s takeover of KEB in 2003, which prosecutors claim was made at an artificially low price. As for the other case, a Seoul appeals court last month cleared the former Korean chief of Lone Star of manipulating the stock price of KEB’s credit card unit in 2003. Prosecutors asked the Supreme Court to review the case. Today’s announcement came days ahead of a self-imposed July 31 deadline to close. By Kim Jun-hyun JoongAng Ilbo / Moon Gwang-lip Staff Reporter[joe@joongang.co.kr] |
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