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HSBC may pull plug on Korea buy after delays
11.06.08
HSBC has signalled that its patience is running out over its lengthy battle to take a $6 billion (£3.05 billion) majority stake in Korea Exchange Bank.
Sandy Flockhart, chief executive for HSBC Asia-Pacific, today hinted to foreign media in Taipei that he may pull out of the deal.
"After three months, both sides will have to consider their positions. We have other options," Flockhart said.
HSBC is still awaiting regulatory approval of his plans to acquire buyout fund Lone Star Funds' 51% stake in KEB.
That has been held up as a result of a legal probe into Lone Star's own purchase of the KEB stake in 2003.
The affair has exposed the sclerotic Korean regulatory system. Any approval has been postponed until legal disputes involving Lone Star are resolved.
A ruling will be made next week on an appeal by Lone Star's South Korea head, Paul Yoo, against a conviction for stock-price manipulation.
He was jailed for five years for manipulating the price of Korea Exchange's credit-card unit to acquire it cheaply.
"We still firmly believe the HSBC deal will be the best choice for the future of KEB," said Lee Nahm Yon, a spokeswoman for the Seoul-based bank.
