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March 11, 2008 |
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KOREA EXPRESS: Regulators Expected to Deny HSBC's Takeover Plan South Korea's financial regulators are expected to deny HSBC's US$6.3 billion acquisition of Korea Exchange Bank in time for an April deadline, Financial Times reports. According to the report, HSBC's offer to buy a 51% stake in Korea Exchange from Lone Star will expire April 30 if it has not been approved by regulators. However, officials at South Korea's Financial Supervisory Commission said they did not expect any decision to be made by then, the report notes. HSBC is under pressure from investors to focus on emerging markets after suffering heavy losses in its consumer lending operations in the US, the report relates. Song Jung-a and Peter Thal Larsen of Financial Times writes that KEB has been at the centre of legal controversy for several years over Lone Star's ownership in the bank. Lone Star and Paul Yoo, its country head, have been convicted for stock-price manipulation of Korea Exchange's credit card unit in 2003. Former KEB and government officials are also still on trial over allegations that the value of Korea Exchange was artificially depressed when it was sold to Lone Star in 2003, the repot recounts. The same report relates that analysts expect both HSBC and Lone Star to wait for regulatory approval without renegotiating the deal even after it expires. "If the government approves the deal, people will complain about the outflow of national wealth and if it disapproves the deal, then foreign investors will frown," a local banking analys was quoted by the same report as saying. Headquartered in Seoul, Korea Express Co., Ltd. -- http://www.korex.co.kr/ -- provides land and marine transportation, and logistics services. The company also operates stevedoring, distribution, and warehousing businesses that serve domestic and international customer needs. Korea Express transports a variety of products, ranging from consumer goods to machinery and turbines. Korea Express also operates Internet home shopping business. Korea Express Bank has been under court receivership since June 2001 after it could not service a KRW1.5-trillion debt, including KRW919 billion owed by then-parent Dong-Ah Construction Industrial Co. Korea Express President Lee Kook- Dong will decide with a Seoul court about when to sell the company, which has a market value of US$601 million. In the company's Web site, Mr. Lee said that Korea Express will strive to end court receivership and improve its liquidity, maximize sales profit through strengthening of cooperation between management and labor, and seek continuous development. Korea Investors Service gave the company a BB rating. |
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