It looked like a stroke of luck at a difficult time for HSBC - a chance to make a big profit from selling one of its most valuable assets in China.
Now, less than a month later, the sale of its stake in Ping An insurance has put in question the reputation of the London-based bank established in Hong Kong and Shanghai about a century and a half ago.
HSBC announced plans early last month to sell its 15.6 per cent stake in Ping An, the mainland's No 2 life insurer, to a Thai conglomerate for US$9.4 billion.
But the deal put both bank and buyer in the media spotlight, a process accelerated this week amid revelations that the bank funding the deal had pulled out and the mainland regulator was poised to reject it amid concerns that the true buyer was a shadowy mainland businessman.
How did the issue develop so quickly? What questions did the bank raise about Charoen Pokphand (CP) Group's ability to finance the deal? Did it realise that the real buyer may have been someone else entirely? And did it use its strong relationships on the mainland to check the likelihood of regulatory approval before agreeing to the deal?
Until last night, HSBC's response to media inquiries had been "no comment". But, prodded by the Hong Kong stock exchange, it insisted in a stock filing that it had no additional information to disclose beyond its original announcement last month (see accompanying report ).
Quite apart from the financial concerns of a bank coping with a huge money-laundering fine from US regulators, HSBC cherishes its image as one of the foreign banks with the closest links to Beijing and its credibility with its rivals and partners on the mainland. That image is being tarnished by the Ping An affair.
An asset manager, monitoring the development of the Ping An deal, said: "The whole situation now, I believe, is definitely far beyond the expectations of HSBC bosses in Hong Kong and London. If they had expected this, they may have said forget the deal and let's find someone else to take over the stake."
The Hong Kong-based asset manager, who declined to be identified because he was not authorised to comment on individual cases, added: "Now it is not just about money. It's about your face - and to some extent, face is more important than money in China."
It's no secret that HSBC has many friends and admirers in China. The banking regulator once praised HSBC for its near 20 per cent stake in Shanghai-based Bank of Communications and how HSBC helped the Shanghai bank improve, making HSBC a role model for other foreign banks. But now, HSBC finds itself linked with a secretive businessman with a different reputation.
Xiao Jianhua , who is considered as secretive as James Bond within China's financial community, is believed to be the behind-the-scenes buyer of the Ping An stake, although CP Group - known for its food exports but with little experience in the financial industry - is the only buyer named in legal documents.
Xiao's detractors argue that his mercurial rise owes much to his ability to use other people's money to leverage loans from banks for big deals and quickly cash out when they are done.
Born in Shandong, Xiao has spent more time living abroad than on the mainland in recent years, after an investigation into a listed company related to his investments.
Xiao's role in the Ping An deal is considered crucial because he helped fund the first part of CP's purchase, which amounted to about 20 per cent of HSBC's stake in Ping An. That raised concerns with the mainland regulator and the Beijing-based China Development Bank (CDB), which halted its loan to CP to help finance the second stage of the deal.
The news about Xiao's role has been widely covered in the past few weeks by both Chinese and international press, including the respected Caixin Century Weekly. Xiao denied any involvement in the deal and CP insisted that the funding for the first-stage deal was all its own money.
A spokesman for HSBC refused to comment on the reports of Xiao's involvement.
On Tuesday, the Post broke the news  that CDB had backed off its earlier decision to provide loans to support CP's bid.
Then on Wednesday, the Post exclusively revealed  that the China Insurance Regulatory Commission (CIRC) was poised to reject the deal over concerns about how it was funded and the identity of the real buyer. The news was later reported by many other media outlets.
The CIRC made its first statement on the case last night, saying: "The CIRC has received an application from Ping An Group regarding the stake transfer, conducted a preliminary review according to rules, and notified the company to provide additional materials."
The Post also learned from its sources that the Ping An deal had prompted growing questions inside HSBC. Doubts were raised over whether HSBC's in-house and external lawyers and accountants had done enough due diligence for the deal, one of the sources said.
Several of the bank's independent non-executive directors are also understood to have privately expressed concern about the handling of the deal. It remains unclear whether senior executives at HSBC knew of Xiao's role before signing the deal with CP. But one source said that when talks with CP began, there was surprise among senior executives at HSBC, who were not convinced by CP's capacity to buy the entire stake alone.
Later, when CP brought to the negotiating table a loan guarantee from the Hong Kong branch of CDB, HSBC felt more confident in the deal. The source noted that some senior HSBC executives involved in the deal enjoyed what the source described as strong "private intelligence channels" with the business community on the mainland.
That raises the question of whether some executives might have caught wind of Xiao's role and whether they chose to remain silent about his involvement. It was this aspect of the deal that eventually caught the attention of Beijing and helped put the transaction in doubt.
The Ping An affair has done little to bolster HSBC's moves towards better corporate governance and transparency at a time when it has come under pressure from minority shareholders unhappy at its performance.
The hurried way HSBC moved to exit from Ping An also indicated a growing focus on its financial position, coming at a time when it is being forced to find US$1.92 billion to settle the US money-laundering fine and, like many other major players in the West, faces pressure to meet tougher capital requirements.
On top of the questions about financing and regulatory problems, the timing of the Ping An deal is also a sensitive matter, coming as it did weeks after The New York Times published an investigation into the wealth of relatives of outgoing Premier Wen Jiabao.
In reports flatly denied by Wen's family, the newspaper claimed that family members, including Wen's mother, reaped handsome returns from taking stakes in the insurer early.
One source said: "What has happened to HSBC in the Ping An deal shows even HSBC, which should know China very well given its long history and relationship in China, may have underestimated the political complexity in this case."
Beijing is in the midst of a leadership transition and new party leader Xi Jinping has vowed to root out corruption, which he called a challenge to social stability on the mainland.
HSBC knows all about leadership changes. Its management has been shuffled several times since chairman John Bond retired in 2006. Bond earned a reputation as a "China hand" and won the respect of many former and current Chinese leaders.
HSBC's two most important investments in China - its stakes in Ping An and the Bank of Communications - were both made under Bond. But his successors seem less passionate about China, in part because they have been forced to deal with the fallout from the 2008 crisis, which hit the bank's US business, and later the European debt crisis.
2010 The US regulator’s Controller of the Currency orders HSBC to review suspicious transactions
2011 HSCB announces it will shed 30,000 jobs worldwide by this year
February 2012 HSBC implicated by informant bank in Canada Libor case
July HSBC compliance chief steps down in front of US senators and the bank’s traders are investigated for rate collusion
October HSBC cuts off ties with some hedge funds
November Bank enters settlement talks with US regulators
December HSBC agrees to pay record US$1.92 billion in fines for money laundering