HSBC has sought to take advantage of the changing of the political guard in South Korea to secure approval for its proposed takeover of the Korea Exchange Bank (KEB).
The KEB is currently the subject of a long-running dispute which has pitted its owner, US-based private equity firm Lone Star, against the Korean tax authorities, and this dispute has stalled HSBC's plans to increase its Asian presence with a significant purchase in Korea.
However, following the victory of Lee Myung Bak, widely acknowledged as more pro-business than his predecessor, in the recent presidential elections, HSBC is attempting to move the matter forward.
Speaking to the Times Online, David Hall, HSBC's head of public affairs in Asia, announced that:
“We hope the regulators will consider the KEB acquisition issue independently from any other issues. We believe the regulators will carefully review our application.”
Talks over the acquisition of Lone Star's controlling stake in KEB began in September, and the negotiating deal may be scrapped if the Korean authorities cannot be persuaded to approve the takeover by the end of April 2008.
Observers are suggesting, however, that the dispute between Lone Star and the Korean government over the former's allegedly outstanding tax liabilities is not likely to be resolved any time soon.
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