Global banking giant HSBC said yesterday it agreed to buy half of South Korea's sixth-biggest bank, but the deal could face regulatory problems because of legal cases involving the current owner.
HSBC has agreed to pay about US$6.3 billion in cash for 51.02 percent of Korea Exchange Bank (KEB) from US private equity fund Lone Star.
HSBC chairman Stephen Green said the deal for South Korea's sixth-largest bank in terms of assets would "provide HSBC with a significant presence in Asia's third-largest economy."
But in Seoul last Tuesday, South Korea's financial watchdog, the Financial Supervisory Commission (FSC), said it would not approve the sale until legal cases were settled involving the purchase of the bank by Lone Star.
"It is difficult to approve the deal" because of the pending case on the legality of Lone Star's 2003 acquisition of KEB, FSC spokesman Hong Young-Man told reporters.
Prosecutors brought charges against six people including a former KEB president last year, accusing them of manipulating figures on KEB's financial health to pave the way for the private equity fund to acquire the bank.
Lone Star was also accused of manipulating the share price of KEB's credit card unit so it could be acquired cheaply by KEB.
The US firm denies the allegations and says the charges were driven by hostility towards foreign investors. It has indicated it favors an early sale of its controlling stake.
KEB has more than 5.4 million customers with over 350 branches across 18 countries, making it South Korea's leading international bank.
HSBC said yesterday that it would not make an offer for the remaining shares in KEB.
Green said the deal reflected the bank's strategy of "expanding HSBC's presence in important growth economies, particularly in Asia, Latin America and the Middle East."
If the acquisition is completed, the South Korean bank will continue to be listed on the Korean Exchange.
If the deal is completed after Jan. 31, the purchase price will be increased by US$133 million, also payable in cash, HSBC added.
In 2003, Lone Star bought 50.5 percent of KEB for some US$1.5 billion and later increased its stake to 64.6 percent.
But last November the pending court cases forced it to withdraw from a US$7.4 billion deal to sell its entire stake to top lender Kookmin Bank.
In June, Lone Star sold 13.6 percent of its holding worth US$1.3 billion to buyers including South Korea's Hana Financial Group and the National Agricultural Cooperative Federation.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS