SHANGHAI – Shares in the Ping An Group, the Chinese insurance and banking giant, fell in Shanghai trading for the second consecutive day on Wednesday over concerns that the British bank HSBC was having trouble selling its 15.6 percent stake in the company.
HSBC had announced plans in December to sell a $9.4 billion stake in Ping An to the Charoen Pokphand Group of Thailand. Part of that sale has already been completed. But media outlets have reported this week that the China Development Bank, a big state lender, has decided not to finance the rest of the deal and that the China Insurance Regulatory Commission is likely to reject the deal.
The report, first published by The South China Morning Post, could not be independently confirmed. The parties involved all declined to comment on Wednesday. A spokesman for Ping An, which is based in Shenzhen, China, would say only that approval of the deal was proceeding normally.
But several analysts have expressed doubts that the full deal will go through on time. In Hong Kong, Ping An shares rebounded on Wednesday from a sharp drop on Tuesday, while Ping An’s share price continued to decline for a second day in trading on the Shanghai Stock Exchange.
The deal is facing difficulty at a time of growing scrutiny of Ping An. The company, which is one of the largest insurers in China and a financial conglomerate worth about $60 billion, has longstanding financial ties to the relatives of China’s prime minister, Wen Jiabao, according to documents obtained by The New York Times.
The Times reported in October and November that the relatives of China’s prime minister had amassed a multibillion-dollar stake in Ping An before the company’s initial public stock offering in 2004.
The stake was bought from a Chinese state-owned company for about $65 million in late 2002, and was at one time worth as much as $3.7 billion. The relatives of Mr. Wen owned a portion of those shares through a series of holding companies. It is unclear whether they have sold their entire stake.
The relatives of China’s former Central Bank chief, Dai Xianglong, also held a Ping An stake through holding companies during the same period. At one time, the companies controlled about $3.1 billion in Ping An shares, according to corporate documents obtained by The Times.
The relatives obtained the shares at a time when the two senior government officials were effectively acting as financial regulators with oversight of Ping An during a crucial period before its I.P.O. in 2004.
The relatives of the two senior officials have denied holding the stakes.
HSBC acquired its initial stake in Ping An in September 2002, and bought additional stakes in Ping An from Morgan Stanley and Goldman Sachs. On Dec. 5, HSBC said it planned to sell its entire 15.6 percent stake to the Charoen Pokphand Group of Thailand to increase capital.
Soon after, one of China’s top business publications, Caixin, reported that a large part of the payment for the first part of the purchase would come from a group of Chinese investors and Ping An’s management team, as well as the former president of Thailand, Thaksin Shinawatra. Ping An and Charoen Pokphand disputed the Caixin magazine report.
Ping An is widely regarded as one of the most successful financial services firms in China. The company was founded in 1988, and has operated as a shareholding company since shortly after that time. It is not considered a state- owned company, but the government of Shenzhen has always held a big stake in Ping An, which operates the country’s second-largest insurer.
DealBook: Ping An Shares Fall for 2nd Straight Day
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DealBook: Ping An Shares Fall for 2nd Straight Day
