HSBC Holdings Plc's agreement to sell a US$7.4 billion stake in Ping An Insurance (Group) Co, China's second-largest insurer, [Businesses Registration]to Thai billionaire Dhanin Chearavanont is set to expire today if the regulator does not approve.

The deal is the second stage of a US$9.4 billion transaction as HSBC on December 5 agreed to sell a 15.6-percent holding in Ping An to Charoen Pokphand Group, making CP Group the largest shareholder of the insurer.

The first phase involving about US$2 billion was completed on December 7. The companies haven't agreed to an extension of the second stage.

Market watchers said HSBC may have to sell Ping An shares at larger discounts if the agreement expires.

[Hong Kong Company Formation & Registration]The market speculated the deal may be not approved by the China Insurance Regulatory Commission after reports said the China Development Bank, which agreed to fund part of the transaction, has withdrawn. Earlier media reports revealed the CP Group may use funds from unclear private sources as the Thai company lacks liquidity.

Ping An said on December 31 that all funds involved in the transaction come from affiliates of CP Group. On January 10 the CIRC ordered the companies to hand in more documents related to the transaction.

[company registration in Hong Kong, Hong Kong company incorporation]The firms and the regulator were unavailable for comment.

Ping An rose 1.4 percent in Shanghai yesterday, beating a 0.12 percent rise in the Shanghai Composite Index. The insurer has jumped 29 percent in Shanghai since December 4 after HSBC announced it would dispose its stake.