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The government decided to begin review of the sales contract for Korea Exchange Bank between Lone Star and U.K.-based HSBC Holdings. A senior government official said Wednesday the government could start the review process before the contract expires at the end of this month. ¡°It could be seen as irresponsible if the government doesn¡¯t do something,¡± he said. ¡°Although nothing is certain at the moment, it is possible that the government could approve HSBC¡¯s acquisition of KEB,¡± he added.
The government was originally minded to postpone the review until the Supreme Court makes a final decision on two court cases involving Lone Star over the dubious original sale of the bank to the offshore fund. The government had put aside an application by HSBC for approval as the major shareholder in KEB. The sudden change in tack is potentially controversial, since opponents feel a domestic bank should not be handed over to foreign capital before legal disputes are settled.
Lone Star was recently found not guilty at second instance of manipulating KEB stocks, while a case seeking to nullify Lone Star¡¯s acquisition of KEB in 2003 is still pending at first instance. Another ranking official in the government said, ¡°Even if the review session begins, it does not mean approval will come immediately. The government means to wait for the court¡¯s decision and see how things unfold before making the final decision.¡± Another official suggested there are dissenting opinions within the government, saying, ¡°Although I personally oppose HSBC¡¯s buyout of KEB, many in the government feel that it is inevitable.¡±
(englishnews@chosun.com )
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