FSS to Block KEB Sale Until Court Ruling

The nation’s financial regulator reaffirmed Tuesday that it will not approve the sale of the Korea Exchange Bank (KEB) until a court rules as to whether the bank was sold at an unfairly low price to U.S. investment fund Lone Star. Asked whether the Financial Supervisory Service (FSS) will approve the sale, FSS Deputy Governor Kim Dae-pyung said that the FSS position about the KEB sale is that “even HSBC is not an exception.”

His remarks, the first official comment on the London-based banking giant’s bid for the KEB, indicate that the regulatory body will stick to its position that any sale will only be allowed after the court delivers its ruling on the legality of the KEB sale to Lone Star back in 2003. HSBC and Lone Star have confirmed that they were in talks over HSBC’s possible acquisition of a majority stake in the nation’s fifth largest bank.