No third party in Ping An deal, CP Group insists

Charoen Pokphand Group has insisted that there was no third party involved in the Bt284-billion acquisition of a stake in Ping An Insurance, after news reports that the group was using illegal money to finance the purchase.

"CP Group wishes to state once again that the purchasers of CP Group are acting entirely on their own account and they are not acting in concert with or on behalf of any third party. Reports on this matter that attempt to project a different story have no substance and are wholly incorrect," it said in a statement yesterday.

"The transaction is still under consideration by the China Insurance Regulatory Commission and we confirm that if approval is received from the CIRC, the CP Group has the necessary resources to complete the transaction."

The statement followed news reports in Hong Kong that CP Group had acted on behalf of other investors in taking over a 15.6-per-cent interest in China's second-largest insurance company from HSBC Holdings. There have also been reports that the CIRC might not approve the deal.

Meanwhile, according to Bloomberg, HSBC Holdings, faced with growing concern that its plan to sell its stake in Ping An Insurance (Group) Co will fail, said it had no material information to disclose about the negotiations.

"HSBC confirms that it is not aware of any information which must be announced to avoid a false market in its own shares," the London-based bank said in a statement on Thursday prompted by Hong Kong's market regulators. The announcement of the proposed sale remained accurate, the lender said.

Concern is growing that Chinese regulators may block the transaction, according to Goldman Sachs Group analysts Mancy Sun and Ning Ma. The sale is part of HSBC chief executive officer Stuart Gulliver's plan to boost returns by selling assets to focus on growing economies in which the bank has the greatest market share.

The CIRC is leading a preliminary review of the application for the transaction, the watchdog said in a statement on Thursday.

Separately, China Development Bank, which had agreed to help finance the purchase by Thai billionaire Dhanin Chearavanont's Charoen Pokphand Grou, cancelled its loans, China's Caixin Online reported on Tuesday.

"If HSBC had some bad news to tell the market, they would, I think," Sandy Chen, an analyst at Cenkos Securities in London, told Bloomberg. "I think there's some room in there for other lenders to step in."

HSBC rose 1.2 per cent to 84.15 Hong Kong dollars in Hong Kong trading yesterday, while Ping An gained 0.3 per cent to HK$68. The benchmark Hang Seng Index increased 0.5 per cent.

HSBC agreed on December 5 to sell its 15.6-per-cent holding in Ping An to four subsidiaries of CP Group in two phases. The first stage, comprising shares valued at about HK$15 billion (Bt58.5 billion), was scheduled for December 7. The sale of the remaining shares requires approval from the CIRC by February 1, or else an extension of the accord.