SHANGHAI (AFP) - China said Friday it had approved British bank HSBC's sale of its stake in insurance giant Ping An to a Thai conglomerate for US$9.4 billion (S$11.7 billion), ending speculation that the deal was on the verge of collapse.
Regulators in Beijing gave the green light just hours before a deadline for approval despite reports in Hong Kong media that they were ready to reject the bid over concerns about funding for the purchase.
HSBC also confirmed that it had received approval to sell the 15.57 per cent stake and said it would complete the transfer of its shares to subsidiaries of Charoen Pokphand Group, owned by Thai tycoon Dhanin Chearavanont, on Feb 6.
"We have been informed that CIRC (China Insurance Regulatory Commission) approval was granted today," HSBC said in a statement.
Charoen Pokphand, which began as an agricultural business but has grown into a huge conglomerate, said it made the payment for the full purchase price to HSBC, according to a separate statement.
Doubts emerged about the deal last month after China's insurance regulator said that it had asked Ping An for more information about the proposed sale.
The government agency was reportedly worried about the source of the massive financing required and whether the Thai firm was the real buyer of the stake, media reports said.
Analysts see the deal, which was announced on Dec 5, as a way for HSBC to shift back towards its traditional banking business and raise funds.
In December, HSBC avoided US prosecution by agreeing to pay US$1.92 billion in fines and to undertake sweeping reforms of its management and compliance systems in a deal with US regulators and justice authorities.
US authorities accused HSBC of intentionally breaking its sanctions on Iran and other countries, and laundering Mexican drug money to build its business.
Ping An, China's second largest life insurer, has previously said it did not plan any changes in strategy as a result of having a new stakeholder.