Wed, Jan 05, 2011 - Page 12 News List

Shared control bid for Nan Shan

WHO’S IN CHARGE:A consortium has made a bid to jointly govern the insurer with AIG, but local firms Goldsun and Secom want to hold the majority position

By Crystal Hsu  /  STAFF REPORTER

Adding drama to the ongoing bid for Nan Shan Life Insurance Co (南山人壽), a consortium of Goldsun Development & Construction Co (國產實業), Taiwan Secom Co (中興保全) and Hong Kong’s Primus Financial Holding Co (博智金融) has offered joint governance with Nan Shan’s US parent, American International Group Inc (AIG).

The offer marks the latest attempt by a potential buyer to secure AIG’s 97.57 percent stake in Nan Shan, as the US firm has yet to select a bidder after putting its Taiwanese unit back on the market.

“By offering to jointly run Nan Shan, we hope to find a solution acceptable to AIG and the Financial Supervisory Commission,” Taiwan Secom spokesman Max Chu (朱漢光) said by telephone.

The commission has repeatedly called on AIG to retain Nan Shan and has promised to provide the necessary measures to stabilize the industry and protect the rights of Nan Shan employees and policyholders.

The consortium, which is set to establish a holding company in the next few days for the purpose of the acquisition, has pledged to employ all Nan Shan executives and staffers and keep their salary and benefits intact for at least two years, Chu said.

While willing to share governance, Goldsun, a cement maker, and Taiwan Secom, a home security supplier, would like to have a majority stake in Nan Shan, Chu said. Both Goldsun and Taiwan Secom are controlled by Lin Shiaw-shin (林孝信) and his family.

“Taiwan Secom has long planned to own an insurance unit,” Chu said. “By offering to join forces with AIG, the consortium should be able to pass the professional competence requirement.”

The commission has required Nan Shan buyers to demonstrate a long-term commitment, the capability to increase capital and competence in professional management.

“The consortium intends to trade Nan Shan shares on the local bourse to meet recapitalization needs in the future,” Chu said.

The consortium will also agree to return all statutory reserves as required by the Nan Shan’s union, Chu said.

AIG has yet to respond to the co-governance proposal, Chu said, adding that Primus is negotiating the matter on the consortium’s behalf.

The financial regulator declined to comment except to reiterate the five review principles under which the buyer must also obey funding rules, especially if Chinese capital is involved.

Wu Chung-chuang (吳崇權), deputy director-general of the commission’s insurance bureau, said the financial regulator has not heard from AIG since a visit before Christmas.

“We cannot say anything before AIG files new share transfer applications,” Wu told an evening media briefing.

The consortium is vying for Nan Shan with four other contenders: Cathay Financial Holding Co (國泰金控), Fubon Financial Holding Co (富邦金控), Chinatrust Financial Holding Co (中信金控) and a consortium comprised of Ruentex Group (潤泰集團) and footwear maker Pou Chen Corp (寶成工業).

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