The Financial Supervisory Commission (FSC) yesterday said it has no objection to Taiwan Fire and Marine Insurance Co’s (TFMI, 台灣產物保險) involvement in the purchase of Next Media Group’s (壹傳媒集團) four local outlets, but the insurer must not supply funding and its top shareholders must not hold key positions in the four media firms.
The financial regulator made the statements after TFMI chairman Steve Lee (李泰宏) inked an agreement late on Tuesday night to take up a 32 percent stake in Next TV (壹電視) through an affiliated development company.
The commission’s Insurance Bureau posted a statement on its Web site, indicating insurance companies and their major shareholders must not sit on the boards of invested listed firms, or assume top management positions or appoint senior executives.
“Lee must not use any insurance funds in his media venture,” the bureau said, adding that it would conduct strict oversight to ensure full compliance to protect the rights of all policyholders.
The insurance company said in a stock filing it would not supply funding for Lee’s personal investment.
Jean Chiu (邱淑貞), the deputy director-general of the commission’s Banking Bureau, said the principle of separation of banking and commerce does not apply to insurance companies.
“We don’t see the need to extend the principle to insurance companies in keeping with international governance practices,” Chiu said by telephone.
The commission said it also no longer has reservations about Chinatrust Charity Foundation (中信慈善基金會) chairman Jeffrey Koo Jr’s (辜仲諒) participation in the buyout, after the details of the transaction showed he does not own a controlling stake in the four companies.
Under the deal, Koo Jr, the eldest son of Chinatrust Financial Holding Co (中信金控) founder and chairman Jeffrey Koo (辜濂松), has cut his stake in the four Next Media’ outlets to 20 percent, from the original 34 percent, after David Lee (李世聰), chairman of funeral-services provider Lung Yen Life Service Co (龍巖), took over the other 14 percent from Koo Jr.
“The commission is now satisfied with the adjustment,” Chiu said.
The commission had earlier asked the Koo family to choose between Chinatrust Financial and Next Media to uphold the principle of separation.
The ownership change does not need approval from the commission since no party involved is in the financial sector, Chiu said.
Meanwhile, the Fair Trade Commission (FTC) said all parties in the buyout must submit applications for regulatory approval.
While it said it still did not know who participated in the deal because it has not seen the contracts, it has sent official documents to all possible buyers appearing in newspapers, FTC spokesman Sun Li-chun (孫立群) said by telephone.
Sun said the FTC did not have a deadline set for the buyers to make their submissions, but added that it would wait until it collects all the necessary information before reviewing the deal.
The FTC has 60 days to complete the review after the process starts, he said.
Apart from Koo Jr, Steve Lee and David Lee, the other members of the investment consortium include Formosa Plastics Group (台塑集團) chairman William Wong (王文淵) and Want Want Holdings Ltd (旺旺控股) chairman Tsai Eng-meng (蔡衍明).
Wong did not comment on the deal yesterday, but the group’s four major units — Formosa Plastics Corp (台塑), Formosa Petrochemical Corp (台塑石化), Formosa Chemicals & Fibre Corp (台灣化纖) and Nan Ya Plastics Corp (南亞塑膠) — said in separate stock exchange filings that the group hopes to make a contribution to Taiwan through participation in the buyout.