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| Did political pressure force Ken Lewis to pull CCB state sale? |
As soon as Bank of America shelved a deal to shift some of its stake in China Construction Bank in December, many observers leapt to a swift conclusion: China had nixed the deal because it didn’t like the idea of the sale, or the timing. It is understood that Bank of America chairman and chief executive Ken Lewis pulled the sale after speaking with his opposite number at CCB, Guo Shuqing, but state pressure is unlikely to be the full story, as subsequent events have demonstrated. It appears that at least part of the reason was a technical and legal issue springing from the fact that Bank of America’s stake had been amassed in two different purchases with different lock-up periods, and it was unclear what rules on allocation of profits would apply to the mooted sale; the fact that the sale did go through less than a month later supports the view that it was a technical delay rather than a veto. Subsequent sales of Bank of China stakes by UBS and Royal Bank of Scotland also undermine the view that China has tried to block sales.
