Regulator likely to delay approval of Hanas KEB purchase

Hana Financial Group Inc. may face a delay in getting final regulatory approval for its acquisition of Korea Exchange Bank (KEB) following a recent guilty ruling on an executive of Lone Star Funds, KEB's largest shareholder, watchers said Monday.

The approval by the Financial Services Commission (FSC) for Hana Financial's November deal to take over a 51.02 percent KEB stake from U.S.-based Lone Star Funds has been expected for Wednesday.

But the regulator is widely forecast to put off its decision as the top court's recent conviction of Yoo Hoi-won, the head of Lone Star's local branch, is expected to trigger a public controversy over Lone Star's 2003 acquisition of KEB and its credit card unit.

The Supreme Court ruled in March 10 that Yoo is guilty of issuing a false disclosure to manipulate stock prices before his company bought the credit card unit of KEB in 2003.

The court said he unveiled the capital write-down plan to buy the card firm at a below-market price, overturning a lower court's decision.

"We are reviewing from various standpoints whether to discuss granting approval for Hana Financial's KEB acquisition at Wednesday's regular meeting," an authority said. "It's a very difficult decision," he said.

Nothing has been decided yet and we are weighing many different scenarios, another official said, asking for anonymity.

Some market watchers believe the regulatory approval could be indefinitely delayed until a final court ruling is delivered over the convicted Lone Star official. (Yonhap)