South Korea's Kookmin Bank will delay its purchase of Korean Exchange Bank while a probe investigates KEB's dealings with US fund Lone Star.
Kookmin said its $6.6 million acquisition was dependent on the outcome of the investigation and may yet be scrapped. Should the investigation turn up any irregularities, Kookmin would be able to walk away from its agreements without any legal action being taken.
The US company is being investigated by South Korean regulators concerning irregularities in its acquisition strategy and charges of illegal lobbying related to its purchase of KEB in 2003.
While the investigation has obviously cast a doubt over Kookmin’s takeover, most analysts are suggesting that it will still go through, with the potential benefit of a lower price for the bank.