The Financial Supervisory Commission said yesterday it would require financial holding firms that fail to meet their takeover investment plans to offload the holdings they have acquired in targeted entities, as part of its efforts to amend regulations to maintain development of the domestic financial market.
These changes were made in compliance with the consensus reached in a national economic conference in July, which formed part of the government's efforts to consolidate the fragmented banking sector.
The new regulations could impact on financial groups such as Mega Financial Holding Co (
Financial holding companies that apply to invest in other financial institutions will now be required to submit a backup plan proving their ability to purchase a regulatory controlling stake of 25 percent within a reasonable period, the commission's spokesperson Susan Chang (張秀蓮) told a press conference yesterday.
Companies will also be required to elaborate on how they will offload their shareholdings if their investment plans fail, Chang said.
Financial groups who fail to follow their proposed exit schemes without a good reason will face difficulty in obtaining the financial regulator's approval for their future expansion plans, the official added.
"We will ask Mega Financial to explain if it cannot fulfill its approved investment plan in the timeframe it proposed," Chang said.
State-controlled Mega Financial applied in December last year to buy up to a 26 percent stake in smaller state-controlled rival Taiwan Business Bank.
The financial group, which now holds a 14.38 percent stake in Taiwan Business Bank, seems reluctant to increase its holdings, citing the lender's poor asset quality.
Meanwhile, the commission has also sought to decrease the likelihood of hostile takeovers by strengthening its investment review process.
Financial groups will be required to formulate response plans to be implemented in the event that targeted companies resist their takeover attempts, according to the revamped regulations.
Chang said the commission now tends to discourage hostile acquisition activities.
The amendment was inspired by the dispute that arose as a result of China Development Financial Holding Corp's (
Other regulatory changes included that, from now on, financial holding firms will not be allowed to assign insiders -- such as major shareholders, board directors or family members -- ?to serve as board directors or supervisors of their invested rivals, unless the firms hold more than a 25 percent stake or enjoy a majority on the board of those rivals.
In addition, the financial regulator is unlikely to approve investment plans of financial holding firms whose major shareholders or board directors mortgage over 50 percent of their shareholdings.
This change was inspired by Chinatrust Financial Holding Co's (中信金控) controversial investment in Mega Financial. Up to 98 percent of Chinatrust Financial Chairman Jeffery Koo's (辜濂松) holdings were used as collateral for loans, Taiwan Stock exchange data showed.
‘ACCORDING TO PLAN’: A company official said that it has set up production sites worldwide to provide services and that its Wisconsin project was going smoothly Hon Hai Precision Industry Co’s (鴻海精密) smart manufacturing center in Wisconsin would begin trial manufacturing in the middle of this year, the company said yesterday, adding that it plans to build a research institute to develop key technologies to support growth over the next five years. Hon Hai, known internationally as Foxconn Technology Group (富士康科技集團), said in an annual report submitted to the Taiwan Stock Exchange that its planned Foxconn Institute for Research in Science and Technology would conduct research into artificial intelligence, next-generation communications, quantum computing, cybersecurity and nano semiconductors in Taiwan. Hon Hai is to make products at the center
TV and online retailer Momo.com Inc (富邦媒體) yesterday said it has set up a new logistics subsidiary, Fu Sheng Logistics Co (富昇物流), to oversee the company’s extensive shipping operations. Leveraging Momo’s 23 satellite warehouses and distribution centers nationwide, Fu Sheng will be in charge of executing the retailer’s same-day shipment plan for deliveries in Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung, Momo said in a press release. Seeking to further shorten its supply chain, the company is to set up another seven satellite warehouses and distribution centers by the end of the year. “Fu Sheng has a fleet of 200 couriers
E Ink Holdings Inc (元太科技), the world’s sole supplier of e-paper displays for e-readers and shelf labels, posted its best quarterly net profit for the first quarter in nine years amid increased demand during a traditionally slow season. Net profit soared 80 percent to NT$787 million (US$26.23 million) in the quarter ended March 31, compared with NT$438 million a year earlier. That translated into earnings per share of NT$0.69, up from NT$0.39. E Ink posted lower royalty income of NT$371.23 million last quarter from NT$448.74 million a year earlier, a company financial statement showed. E Ink said that it expects royalty income to
The latest US government action against Huawei Technologies Co (華為) takes direct aim the company’s HiSilicon (海思) chip division — a business that in over the past few years has become central to China’s ambitions in semiconductor technology, but is now to lose access to tools that are central to its success. That could make it the most damaging measure by the US yet against a Chinese company. On Wednesday, US officials told reporters that the Huawei’s chip division functioned as a “tool of strategic influence” for the Chinese Communist Party. Huawei, for its part, denounced the US allegations and called the