Sat, Apr 17, 2010 - Page 11 News List

Fubon to set up venture fund with PRC partners

INDUSTRIAL FUNDFubon Financial will front 40% of the capital, while the Fujian government and the investment arm of China Development Bank will contribute 30% each

STAFF WRITER, WITH CNA

Fubon Financial Holding Co (富邦金控) is planning to cooperate with the investment fund of China’s state-run China Development Bank (國家開發銀行), as well as the Fujian provincial government, to set up an industrial venture capital fund, a Fubon Financial official said yesterday.

Under the plan, the three parties will inject 5 billion Chinese yuan (US$732.36 million) into the fund, with Fubon Financial putting in the largest portion of the investment at 40 percent, while the other two investors each contribute 30 percent, Fubon Financial president Victor Kung (龔天行) said.

The planned fund will exist in the form of a private equity fund that will target all cross-strait industrial businesses without limitation on the category of industrial sectors, Kung said.

Fubon Financial is regarded as a Taiwanese financial holding company with a comprehensive business deployment in China. Apart from the planned investment fund, it is also working to form a fund management company with Zhejiang Province-based Founder Securities Co (方正證券), the company said.

Meanwhile, Fubon Financial chairman Daniel Tsai (蔡明忠) said the company might consider acquiring Kuo Hua Life Insurance Co (國華人壽), as the government custody of the debt-ridden property insurer is due to expire at the end of next month.

Kuo Hua was taken over by the semi-official Insurance Stabilization Fund (保險安定基金) and Taiwan Insurance Institute (保險事業發展中心) in August last year. The government custody — the first of its kind among the nation’s life insurers in 40 years — will last for nine months until May 4.

Before placing a formal bid, Tsai said the company would want to know how bad Kuo Hua’s debt problem is and the amount of subsidies a potential bidder could obtain from the Insurance Stabilization Fund to complete the acquisition.

Tsai also expressed hope for the financial services sector to be included in the first list of goods and services subject to immediate tariff concessions or exemptions under the “early harvest” program of a proposed economic cooperation framework agreement (ECFA) between Taiwan and China.

The early harvest lists are seen as the backbone of the trade pact Taiwan hopes to be sealed as early as June.

The financial sector was not placed on the agenda of the second round of ECFA talks held on March 31 and April 1.

The arrangement drew concern from Taiwanese investors in China who have been calling for the two sides of the Strait to open their doors to each other’s banking sectors.

In addition to urging the government to proceed with ECFA talks at a faster pace, Tsai called for the authorities in charge of financial affairs to relax restrictions that restrain Taiwanese banking operators from investing in China.

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