Watchdog set to approve KEB takeover next monthThe financial watchdog is expected to approve Hana Financial Group’s purchase of Korea Exchange Bank (KEB) next month to finally conclude the long-pending deal, sources said yesterday.
Financial regulators are close to stamping the deal to buy the country’s fifth-largest lender from Lone Star regardless of nagging eligibility issues, they said.
Currently, the Financial Supervisory Service, the executive body of the nation’s Financial Services Commission, is reviewing the U.S. buyout fund’s eligibility as KEB’s major shareholder.
“We have finished reviewing the classification of Lone Star as a possible industrial player ,and we plan to report to the FSC next week,” an FSS official said.
The FSS has been reviewing whether the U.S. firm, which owns KEB, is eligible to own more than a 10 percent stake in the bank according to local banking laws.
The FSC is likely to conclude that it is difficult to designate Lone Star as an industrial capitalist due to conflicting legal assessments, the sources said.
Since Lone Star has been disqualified as KEB’s largest shareholder and ordered to sell most of its stake, it does not have any direct impact on its sale of KEB to Hana Financial, they said.
Controversy has been raging over whether Lone Star, which bought a controlling 51.02 percent stake in the Korean bank in 2003, should have been recognized as a nonfinancial player. If so, it would only be permitted to own a maximum 4 percent stake in a financial company.
Meanwhile, late last year a local court found Lone Star guilty of manipulating stock prices related to the merger of KEB’s card unit in 2003.
The FSC will soon decide on the approval of Hana Financial’s application to affiliate KEB under its wing after it wraps up Lone Star’s reclassification.
Last December, Hana Financial Group agreed with Lone Star to slash the purchase price of KEB by 11 percent to 3.92 trillion won ($3.4 billion), paving the way for the U.S. firm to exit the Korean market. Yonhap
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