Hong Young-man, a spokesman for the FSC, said in a briefing on Thursday that HSBC submitted the application for approval on Monday, some three months after HSBC signed the deal with Lone Star in September.

Hong said the financial regulator will send the bank a letter stating that it will review the application after the ongoing Lone Star legal case is resolved. Prosecutors allege that Lone Star paid an artificially low price for its 2003 purchase of KEB and manipulated KEB Card's stock price.

Another FSC official said that the letter will confirm the FSC's position that it cannot approve the deal before the court makes a final ruling and inform HSBC that the case may take a long time to sort out.

The Lone Star case is pending in a lower court. The trial has been delayed because witnesses, including Lone Star Fund executives, have not presented themselves to the court. It is unclear when a ruling might be made.

HSBC signed the deal under the condition that it can be revoked if HSBC fails to secure the Korean government's approval for the takeover by April 30 of next year.

(englishnews@chosun.com )