| China rejects U.S.-based Carlyle's bid to buy stake in bank |
BEIJING, July 3 (AP) -- Chinese regulators have rejected U.S. investment fund Carlyle Group's bid to buy a portion of a small bank in western China, the bank said.
Regulators rejected Carlyle's bid for 8 percent of Chongqing Commercial Bank Co. because it "doesn't meet current relevant rules and regulations," the bank said in its annual report, citing an April 4 notice from regulators. It gave no other details.
A spokeswoman in Hong Kong for Carlyle did not immediately respond to a message seeking further information.
China has stepped up scrutiny of foreign corporate acquisitions following an uproar over Carlyle's 2005 bid to buy a company that manufactures construction equipment.
Chinese banks have been seeking out foreign banks as strategic investors to get access to capital and expertise. It wasn't clear whether Chinese regulators would consider Carlyle an appropriate partner for a bank, due to its lack of banking experience.
Carlyle, based in Washington, and Hong Kong's Dah Sing Bank agreed in December to buy a combined 24 percent stake in the Chongqing bank in the southwestern industrial city of Chongqing.
The Dah Sing purchase of a 17 percent stake was approved by regulators in April.
China received more than US$60 billion in foreign investment last year but acquisitions of even minority stakes in existing companies are still unusual and politically sensitive.
Critics complain that China might be selling important assets too cheaply or endangering its economic security.
A provision in a proposed anti-monopoly law under consideration by China's legislature would require a national-security review for foreign takeovers of Chinese companies.
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