Sunday, May 27, 2012
(This story was originally published Thursday)
DUBAI (Zawya Dow Jones)--The merger between the Omani operations of HSBC Holdings PLC (HSBA.LN) and local lender Oman International Bank (OIBB.ON) has been temporarily put on hold until a local ministry reviews an objection lodged by an India-based businessman.
The two banks last month announced the merger which would create the sultanate's second-largest bank by branches and deposits.
An Omani daily reported earlier on Thursday that Saleem Khan, the India-based owner of a garments factory in Oman, raised objection to the merger with the Omani Ministry of Commerce and Industry, citing a legal case he had been fighting with the bank in previous years. According to the paper, Khan is seeking 2 million Omani rials ($5.2 million) in compensation from the bank.
"I had to face a lot of trouble with the bank but I approached them seeking justice," Khan told the newspaper.
HSBC in a statement said the merger is proceeding in accordance with relevant laws and regulations. A spokesman for the bank confirmed the merger is on hold until the ministry has reviewed the case.
"Omani law provides a creditor objection period so that a creditor who believes they will be prejudiced by the merger can object," HSBC said.
The proposed merger comes at a time when HSBC is reviewing its operations worldwide and retrenching from certain countries as part of an effort to cut costs and focus on its more profitable businesses.
Oman International Bank owns 85 branches and HSBC nine in the Gulf state. OIB has assets of $3.2 billion and its activities are evenly split between retail and wholesale banking. HSBC has $2.5 billion of assets in Oman.
HSBC said in April the merger would not affect OIB's listing on the Muscat Securities Market and that it could be completed in the second quarter of 2012.
-By Nicolas Parasie, Dow Jones Newswires, +9714 446 1681, nicolas.parasie@dowjones.com; Twitter: @ZDJnews
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
27-05-12 0351GMT
