HSBC rebuffed on Korea bank
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.HSBC'S AMBITIONS to expand further in South East Asia took a knock yesterday after it emerged that six months of talks over the $900m acquisition of a controlling stake in South Korea's SeoulBank had broken down over the definition of "bad loans".
"The difference is too huge,", the chairman of Korea's Financial Supervisory Commission (FSC), Lee Hun-jai said. "It would be very difficult to narrow. HSBC is asking too much. "There are no longer talks between SeoulBank and HSBC," he added bluntly.
A spokesman for HSBC declined to comment, except to say: "We are awaiting confirmation from the Korean government about the report."
Under a memorandum of understanding signed in February, HSBC agreed to buy 70 per cent of SeoulBank for $700m and to pay the government a $200m "facilitation fee". The government was also to keep 30 per cent and take warrants equal to 19 per cent of the equity.
In return, the government promised to assume the bank's past bad debts. But two deadlines have already been missed when HSBC and the FSC failed to agree on how much of the bank's assets should be defined as bad debt.
South Korea agreed to sell two loss-making banks to foreign investors at the end of 1997 to bring "best international practice" to its local financial industry as a condition of the $58bn bailout by the International Monetary Fund at the height of the Asian financial crisis.
In July it injected $4.5bn to recapitalise the other bank, Korea First, which Newbridge Capital, a US investment fund, is taking over in a $600m deal.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments