China says wants more clarity on Ping An sale

10th January 2013, Comments 0 comments

China's insurance regulator said Thursday it had asked insurer Ping An for more information about its proposed sale of a stake to a Thai tycoon, after media reports claiming the deal may collapse.

British bank HSBC said last month it would sell its stake in Ping An, China's second largest life insurer, to Dhanin Chearavanont's conglomerate the Charoen Pokphand Group for $9.4 billion.

But Hong Kong's South China Morning Post newspaper said Wednesday that Chinese regulators were ready to reject the bid over concerns about funding for the purchase.

It said state-owned China Development Bank, which had originally agreed to provide loans to help CP Group buy HSBC's 15.57 percent stake in Ping An, was reconsidering its decision.

The China Insurance Regulatory Commission (CIRC), which must approve the deal, said it had asked for more information but gave no details.

"The CIRC has already received the Ping An Group application for the equity transfer, and in accordance with rules carried out a preliminary examination and notified the company to submit supplementary materials," it said in a statement to AFP.

The government agency is reportedly worried about the source of the financing and whether the Thai firm would be the real buyer of the stake, the Post reported, citing sources close to the regulator.

The collapse of the deal would be a big blow to Britain-based HSBC, which has been selling its non-core assets as part of a broad restructuring plan designed to increase profitability.

Ping An Insurance closed down 0.18 percent at 44.99 yuan ($7.23) in Shanghai trading on Thursday. It fell 1.38 percent to HK$67.80 ($8.75) in Hong Kong, where it is also listed.

© 2013 AFP

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