Wed, Mar 31, 2010 - Page 1 News List

PRC hand seen in Nan Shan bid: report

BUYOUT A report says individuals involved in the attempt to buy the insurance firm may have China connections, while some may have engaged in securities speculation

By J. Michael Cole  /  STAFF REPORTER

“Funding sources of China ­Strategic basically comes [sic] from China and Hong Kong, while the shareholders are made up of China and Hong Kong tycoons as well as speculators,” the report said, adding that this proves that China Strategic “is indeed controlled by mainlanders.”

“China Strategic, Primus Financial or its investor, Primus Pacific, all lack ... experience in managing financial holdings, let alone in [the] life insurance industry. In addition, the newly established Primus Nan Shan Holding Company was registered ... less than a year [earlier] for this case. Therefore, observers have called it a 'shell' corporation for falling short on both capital structure and a decent managerial team,” the report says.

The report concludes: “Most people involved in this case are Chin[ese] officials, mainlanders, or [individuals] with a Chinese background. Although it [is] hard to keep track of the final beneficiary due to ... several transfer[s] [in] the investment, concerns about ... mainland Chinese money still exist.”

American International Group sold Nan Shan to Primus Financial on Oct. 12 for US$2.15 billion, which filed an application with the Ministry of Economic Affairs' Investment Commission in November. On Feb. 12, Primus and China Strategic sent a revised application after the commission requested that it provide more information on its investors and sources of funding.

On March 11, Minister of Economic Affairs Shih Yen-shiang (施顏祥) said there was no evidence that Chinese capital was involved in Primus Financial, adding that none of the 44 investors who provided information in the application were Chinese citizens.

Several of the stakeholders at China Strategic, which has an 80 percent stake in Primus Nan Shan, are Hong Kong-UK dual nationals, but none are Chinese citizens, he said.

Fan Liang-tung (范良棟), head of the Investment Commission, said on Monday he could not comment.

“The case is still in the evaluation and approval stage. I am not in a position to comment,” Fan told the Taipei Times by telephone.

The outcome of the commission's investigation is expected to be announced this week.

ADDITIONAL REPORTING BY JASON TAN

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