HSBC was reported to have set a July 31, 2008, deadline for sealing the KEB deal. Yet, there is little possibility that criminal proceedings with the two pending cases will be completed by the end of the year, let alone within a month or two. The financial regulator’s rigid position is adding to speculation that it is deliberately stalling its decision on the KEB sale in consideration of the unfavorable public opinion against the foreign sale. What favors, if any, can South Korea benefit from? The Seoul Appellate Court’s acquittal of U.S. private equity firm Lone Star Funds from stock price manipulation charges happened this week, but HSBC set a deadline and many Koreans are tired of US and US-related manipulation in Korea.
Financial regulators and justice authorities say that out of the many foreign investment funds that invested here following the 1997 financial crisis, only Lone Star has been suspected of business improprieties. They cite an earlier embezzlement case involving a former Lone Star Seoul office head. The case was suspended after the office chief left Korea.
Why does HSBC want the KEB deal? Is it a desire to be associated with a black mark, just as HSBC did with predatory lender Household International? How does HSBC intend to grease the wheels of this deal? Time will tell. As for now South Koreans are tired of this deal and probably suspect the worst. They may be right.
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