A South Korean high court on Tuesday cleared US private equity house Lone Star of manipulating the stock price of a former credit card unit of Korea Exchange Bank, rejecting an earlier ruling.

A lower court in February found both Lone Star and the head of Lone Star�??s South Korean operations, Paul Yoo, guilty of driving down the share price of KEB�??s former credit card unit by spreading rumours to allow the bank to buy the unit at below-market prices.

The verdict is widely expected to provide a catalyst to the stalled $6.3 billion sale of KEB by Lone Star to UK-based HSBC, although it may be difficult for the Lone Star-HSBC deal to win regulatory approval by a July 31 deadline.