TIMELINE: Key events related to Korea Exchange Bank sale
SEOUL (Reuters) - HSBC (HSBA.L) said on Friday it had dropped its $6.3 billion offer to buy 51 percent of Korea Exchange Bank (004940.KS) from U.S. private equity firm Lone Star, the latest fallout of the ongoing financial market turmoil.
Following are events since Lone Star bought 50.5 percent of KEB for $1.2 billion in August 2003:
- Feb 28, 2004: KEB absorbs KEB Credit Service Co Ltd. Prosecutors will later charge Lone Star of manipulating the stock price of the card unit to buy it cheaper.
- April 19, 2006: Lone Star Chairman John Grayken tells a news conference in Seoul that Steven Lee, former head of Lone Star's South Korean operations, has been fired for misappropriating funds and will be sued by the company.
- May 19, 2006: Kookmin Bank 060000.KS signs a deal worth up to $7.3 billion to buy KEB from Lone Star and two other major shareholders.
- June 19, 2006: The Board of Audit and Inspection says Lone Star's 2003 purchase of KEB contained some flaws, but clears Lone Star of any impropriety, while leaving the door open to possible sanctions by prosecutors.
- Nov 20, 2006: South Korean prosecutors indict KEB and a unit of Lone Star on charges of unfair stock trading.
- Nov 23, 2006: Lone Star says it will end the agreement to sell KEB to Kookmin, citing the tussle with prosecutors.
- Dec 7, 2006: Prosecutors say Lone Star's purchase of KEB was illegal, saying the fund colluded with the lender to inflate the bank's losses, allowing Lone Star to pay around $900 million less than KEB was worth.
- June 22, 2007: Lone Star sells a 13.6 percent stake in KEB, and disposes of builder Kukdong Engineering and Construction and leasing firm STARLease for a total $2.3 billion.
- Sept 3, 2007 - HSBC (0005.HK) says it agreed to buy 51.02 percent of KEB for $6.3 billion cash from Lone Star, but it did not intend to make a tender offer to KEB's remaining shareholders.
- January 24, 2008 - Grayken left South Korea after 10 days of questioning by prosecutors and giving testimony to defend the head of its South Korean operations, Paul Yoo, who was standing trial on charges of stock manipulation.
- February 1, 2008 - A Seoul court found Yoo guilty of manipulating the stock price of the former KEB credit card unit and sentenced him to five years in jail. Lone Star is appealing the ruling.
- March 5, 2008 - South Korea's Fair Trade Commission ruled HSBC's purchase of KEB would not hinder market competition. It adds the final decision lies with the financial regulator.
- July 31, 2008 - The deadline for HSBC's completion of the KEB deal passes without regulatory clearance.
- September 8, 2008 - The South Korean regulator says it may approve the purchase in the near future if no fault is found in documentation.
- September 19, 2008 - HSBC says it terminates the acquisition agreement after considering factors including global financial market conditions.
(By Seoul Newsroom; Editing by Keiron Henderson)
