The Financial Supervisory Commission (FSC) fined Singfor Life Insurance Co (幸福人壽) NT$4.5 million (US$136,300) on Thursday for acquiring a plot of land in Taipei’s Xinyi District with excess capital, local media reported yesterday.
Singfor paid Citibank Taiwan (花旗銀行) NT$3.389 billion, or NT$3.1 million per ping, for the 1,093-ping parcel of land across from the Taipei 101 building in July. The deal was Singfor’s biggest real estate investment in recent years.
However, the firm has posted a negative net worth for the past few years, so by law, it shouldn’t have been able to close a transaction worth more than NT$100 million, the Chinese-language Economic Daily News reported.
The commission said Singfor must sell the land within a year and punish the employees responsible for negligence, the report said.
Singfor assistant manager Wu Wen-long (吳文龍) said the firm respected the commission’s decision, and two top executives had been given administrative penalties.
Singfor, however, did not say whether chairman Eric Teng (鄧文聰) was one of those punished.
The commission’s ruling will cause losses for Singfor, although Wu said the company was upbeat about the land’s potential.
The commission also barred Singfor from investing in real estate before the Xinyi plot is sold, the report said.
Meanwhile, the FSC tried to encourage banks to provide loans to local businesses hit by the global credit crisis on Thursday.
It said that local banks whose lending grows by 0.5 percent month-on-month would not have to pay a deposit insurance fee to the Central Deposit Insurance Corp for the month.
Banks must have a capital adequacy ratio of more than 8 percent and a non-performing loan ratio of under 2.5 percent to qualify, the commission said.
The move came just two weeks after FSC Chairman Sean Chen (陳冲) told the legislature that the FSC would develop a mechanism to encourage banks to extend loans.