Australia's Sundance Resources is expecting that its suitor Hanlong would not be able to show credit approval on deadline for its $1.4 billion takeover offer.

Both Sundance Resources and Hanlong have decided on whether or not they would not pursue the deal following a Chinese media report revealing that Hanlong Mining Chairman Liu Han will be investigated by the police for harboring his younger brother, who is a suspect to a murder.

The detention of Lui was a new setback in the takeover deal which was first announced in October 2011 when Hanlong purchased a 14% stake in Sundance, aiming the company for its Mbalam iron ore project worth $4.7 billion in Africa.

The deal had been delayed after some executives of Hanlong in Australia were charged with insider trading.