China's insurance regulator said Thursday that it had asked insurer Ping An for more information about the proposed sale of a stake in the company held by HSBC to a Thai tycoon, after media reports said the deal might collapse.
British bank HSBC said in December that it would sell its 15.57 stake in Ping An, China's second largest life insurer, to Dhanin Chearavanont's conglomerate, the Charoen Pokphand Group, for $9.4 billion.
But Hong Kong's South China Morning Post newspaper said Wednesday that Chinese regulators were ready to reject the bid over concerns about funding for the purchase.
It said that the state-owned China Development Bank, which had originally agreed to provide loans to help CP Group buy HSBC's stake in Ping An, was reconsidering its decision.
The China Insurance Regulatory Commission (CIRC), which must approve the deal, said it had asked for more information, but gave no details on exactly what it sought.
"The CIRC has already received the Ping An Group application for the equity transfer, and in accordance with rules carried out a preliminary examination and notified the company to submit supplementary materials," it said in a statement to AFP.
The government agency is reportedly worried about the source of the financing and whether the Thai firm would be the real buyer of the stake, the Post reported, citing sources close to the regulator.
HSBC subsequently issued a statement in London which said that "it is not aware of any information which must be announced to avoid a false market in HSBC's securities or of any inside information that needs to be disclosed under Part XIVA of the Securities and Futures Ordinance.
"HSBC further reaffirms that, on the basis of this enquiry, the information contained in the announcement of 5 December 2012 remains accurate."
If the deal collapsed it would be a big blow to HSBC, which has been selling non-core assets as part of a broad restructuring plan designed to increase profitability.
Ping An Insurance closed down 0.18 percent at 44.99 yuan ($7.23) in Shanghai trading on Thursday. It fell 1.38 percent to HK$67.80 ($8.75) in Hong Kong, where it is also listed.
HSBC shares showed a gain of 0.84 percent to 675.50 pence in London, where the FTSE 100 index was up by 0.25 percent overall.