SEOUL : South Korea's corporate watchdog said Tuesday it would look into legal issues surrounding banking giant HSBC's planned purchase of a bank here amid a battle over the domestic lender's previous sale to a US hedge fund. British-based HSBC Plc last month agreed to buy a 51.02 percent stake in the Korea Exchange Bank (KEB), the country's sixth largest lender, for 6.3 billion dollars in cash from US private equity fund Lone Star.
South Korea's Fair Trade Commission, however, said in a statement that it planned to "carefully review" the legal issues in the deal.
The Financial Supervisory Commission, South Korea's financial regulator, has also said separately it would only approve the deal after court cases are settled.
Lone Star scrapped an earlier deal to sell KEB to a South Korean lender, Kookmin Bank, due to legal disputes.
Lone Star raised controversy in South Korea by buying the majority stake in KEB for 1.5 billion dollars in 2003 and later increasing its stake to 64.6 percent.
Prosecutors have accused six people, including a former KEB president, of manipulating figures on KEB's financial health to pave the way for the private equity fund to acquire the bank.
Lone Star was separately accused of manipulating the share price of KEB's credit card unit so it could be acquired cheaply by the main bank.
The US firm has denied the allegations and says the charges were driven by a latent hostility towards foreign investors. It says there are no legal obstacles to the planned sale to HSBC. - AFP/ms
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