The Ping An deal - what is HSBC thinking?
The bank's deal to sell its stake in the mainland insurance giant is in doubt, raising several questions about its handling of the transaction
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?