Ping An Insurance

Ping An may have funded partners in Thai's purchase of HSBC's stake

Insurer denies magazine's allegation it aided Thai billionaires' deal to buy company stock

PUBLISHED : Sunday, 23 December, 2012, 12:00am
UPDATED : Sunday, 23 December, 2012, 5:26am

Ping An Insurance managers may have helped fund a Thai billionaire's Chinese backers in the man's purchase of HSBC's stake in the company, the website of Caixin Century Weekly said yesterday.

The report, an extract from the magazine's December 24 issue, did not name the managers involved. Ping An Insurance denied the allegation, which concerns partners in the Dhanin Chearavanont's deal to buy HSBC's 15.6 per cent stake in the insurer for US$9.4 billion.

"That's an irresponsible report. There absolutely was no such a thing," said Sheng Ruisheng, Ping An's Shenzhen-based spokesman, referring to the company management's alleged involvement in the deal.

Suthana Hongthong, a Bangkok-based spokeswoman for Charoen Pokphand Group, the Dhanin-controlled company buying HSBC's stake, declined to comment on the Caixin report.

London-based HSBC said on December 5 it had agreed to sell its stake in Ping An to three indirect wholly owned units of Charoen Pokphand in two phases. The first, comprising 20.8 per cent of the shares worth about HK$15 billion, was completed on December 7. The second, consisting of 79.2 per cent of the shares, is conditional on approval from China's insurance regulator, according to a statement from HSBC.

Citing several anonymous sources from institutional investors, Caixin said only a third of the first payment came from Thai investors, with the remainder funded by Chinese investors.

One of the backers, financier Xiao Jianhua, allegedly obtained most of his part of the funds by borrowing from three Chinese city commercial banks that he controls, according to the Caixin report.

The money was repaid to the banks 20 days later and probably replaced by funding from Ping An's management, the report said, citing allegations from unidentified sources. Caixin said its own investigations could not verify its sources' allegations.

According to Caixin, Xiao, 41, a Peking University law graduate, founded Tomorrow Holdings in 1999 and later developed it into a financial conglomerate that controls several public companies and banks, securities houses and trust companies.

A senior source from the China Insurance Regulatory Commission confirmed that funds for settling the first payment to HSBC were transferred from Charoen Pokphand's account, Caixin reported.

But the report cited anonymous sources as saying that the "concerned government agency" had been keeping a "very close watch" on the deal.

Additional reporting by staff reporter