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  1. #1
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    HSBC hits regulatory issues over Iraq business exit

    HSBC hits regulatory issues over Iraq business exit

    By Ahmed Rasheed
    BAGHDAD, July 31 | Wed Jul 31, 2013 8:58am EDT

    (Reuters) -
    HSBC Holdings is struggling to exit its Iraqi operations, having had two proposals to sell its stake in Dar Es Salaam Investment Bank (DES) rejected by the country's regulator, according to the Iraq Securities Commission (ISC).

    The saga underlines the risks for international firms of doing business in Iraq, where a complex regulatory and political environment, as well as security worries, can offset the attractions of rapid economic growth fuelled by oil production.

    HSBC said last month that it was exploring options to dispose of its 70.1 percent holding in the Iraqi bank, following a strategic review by the international lender.

    DES, which focuses on corporate and consumer banking and has eight branches in Iraq, has been linked to HSBC since October 2005. Its shares last traded at 1.36 dinars, down 63 percent from this year's high, which was hit in January, and far below levels around 6.00 dinars in 2011. The current market price values HSBC's stake at about 100 billion dinars ($86 million).

    In a statement, DES chairman Asad al-Kudhairi said there had been problems which delayed the sale of HSBC's stake, adding that the ISC objected to HSBC selling at a value significantly below the market price.

    HSBC's previous proposals to sell its stake in DES were not approved by the ISC because they contradicted Iraqi financial regulations, the regulator said.

    "HSBC first proposed abandoning its stake in DES to Iraqi investors. We asked them the reason for abandoning its stake and the mechanism for transferring the stake, but they never returned with answers," ISC chairman Abdul Razzak al-Saadi told Reuters.

    One of HSBC's proposals was for it to sell its DES shares at a nominal price of one Iraqi fils (a thousandth of a dinar) each, but HSBC officials did not explain why the bank wanted to do this, the regulator added. He did not elaborate on the ISC's objections to HSBC's proposals.


    article continues reuters.com


  2. #2
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    Ahhhhhhhh. Even big money can't leave Iraq now. These sand monkeys are committing societal suicide in front of our eyes.

  3. #3
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    they are trying to force HSBC to stay

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