Nan Shan Life Insurance Co (南山人壽) sales agents yesterday said they would take drastic steps to block the acquisition of the insurer by Ruen Chen Investment Holding Co (潤成控股), unless the prospective buyer sits down and agrees to address lingering concern about the agents’ employment status and benefits.
The move came two days after Ruen Chen tapped former Nan Shan chairman Koay Boon-teik (郭文德) as its top consultant in a bid to demonstrate the professional management competence requirement set by the Financial Supervisory Commission.
The financial regulator also requires the prospective buyer to pledge to safeguard the rights of policyholders and employees, make a long-term commitment, demonstrate the capability to increase capital for at least 10 years and sift out Chinese capital when raising funds.
Wedding Lan (藍維鼎), spokesman for the Nan Shan agents’ union, said 8,000 sales agents planned to invite Ruentex Group (潤泰集團) chairman Samuel Yin (尹衍樑), whose firm owns an 80 -percent interest in Ruen Chen, to talks next month to clarify longstanding labor issues.
“We’ll send the invitation in person, by letter or over the telephone, and hopefully the talk can take place no later than Feb. 20,” Lan said by telephone.
Ruen Chen, which last week offered to buy American International Group Inc’s (AIG) 97.57 percent stake in Nan Shan for US$2.16 billion, has said it agreed to retain all Nan Shan employees for at least two years and maintain the employees’ existing compensation and benefits packages.
The buying group, 20 percent owned by footwear maker Pou Chen Corp (寶成工業), also promised to keep the existing organizational and commission structure, if it obtains regulatory approval for the transaction.
However, “the promise is vague since the consortium fails to say whether it views 33,000 sales agents as employees entitled to pension funds,” Lin said.
AIG has defined the sales agents as independent contractors who are not qualified for health and labor insurance or retirement benefits, although Lan and other union members insist they should be treated as employees.
In addition, the union demands that AIG and Ruen Chen settle the issue of the provident fund before closing the share transfer.
“The fund is taken from our compensation package and should be fully returned,” Lan said.
The fund, derived from premiums to encourage sales of long-term insurance policies, amounted to NT$13.2 billion (US$455 million) as of last November, according to Nan Shan spokeswoman Amanda Chou (周佳容).
“Ruen Chen has indicated it will consult all agents before reaching a conclusion on the issue,” Chou said, adding that AIG returned part of the fund.
The purchasing group has yet to reach out to the union, Lan said.
“We will take to the streets and other drastic measures if Ruen Chen ignores our plea,” he said.
Ruen Chen chairman Cheng -Chuan-tai (鄭銓泰) said the company was giving top priority to obtaining approval for the purchase.
On Monday, the group recruited Koay as chief consultant to advise on management issues, Cheng said by telephone on Tuesday. Koay steered Nan Shan in 2004 and remained on its board of directors until May last year.
Cheng said Ruen Chen plans to file the acquisition application this quarter and is putting together documents required for the review.
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