HSBC has applied for a review of its $6.3 billion purchase of a stake in Korea Exchange Bank (KEB) to South Korea's Fair Trade Commission, the anti-trust body said on Tuesday.
HSBC had announced in early September that it agreed to buy a 51.02% stake in KEB from private equity firm Lone Star, in a deal that could propel the UK-based bank into the top ranks of Asia's third-largest banking market.
"HSBC handed in the application for the merger on Sept. 27 directly," the commission said in a one-page statement. "The FTC will proceed with the merger review in a prudent manner. It takes normally 30 days but can be extended for additional 90 days if necessary."
The anti-trust approval is one of two regulatory procedures that buyers of South Korean companies undergo.
HSBC, Europe's biggest bank, had said the purchase was conditional on receiving necessary approvals by April 30, 2008, while Lone Star was stuck in a legal dispute over whether it had acted illegally in the way it bought KEB in 2003. The Dallas-based fund had denied any wrongdoing in the Korean deal.
Analysts and domestic banks had reservations over whether the HSBC-KEB transaction would go through, citing complex legal hurdles and a lengthy approval process.
The Financial Supervisory Commission, South Korea's top financial watchdog, said last month that it would not approve the sale of KEB shares until all legal problems were solved over Lone Star's KEB investment.
HSBC had tried repeatedly to buy a bigger presence in South Korea in a move seen aimed at capitalizing on booming consumer banking and wealth management.