The US Federal Reserve on Tuesday approved China Investment Corp’s (CIC, 中國投資公司) bid to buy up to a 10 percent voting stake in investment giant Morgan Stanley.
The US central bank and regulator said the government-backed wealth fund was free to buy up the 10 percent stake, noting that CIC had vowed not to try to control how the US firm is run.
“Based on the foregoing and all the facts of record, the board has approved CIC’s application to acquire up to 10 percent of the voting shares of Morgan Stanley,” the Federal Reserve said in a statement.
CIC holds 2.49 percent of voting common stock of Morgan Stanley which it had purchased last year, the Federal Reserve said.
It required the Fed’s authorization to hold up to 10 percent in the investment bank after some US$5 billion-worth of securities it had bought in the investment bank at the start of the subprime mortgage crisis in 2007 were converted into voting shares last month.
The shares, which would effectively increase CIC’s share stake to between 9 percent and 10 percent, are currently held in a custody account which will be released following the board’s approval, it said.
The Chinese government created CIC in 2007 with the aim of investing overseas China’s massive foreign exchange reserves, which reached a record US$2.454 trillion at the end of June.
CIC currently has investments at a value of some US$300 billion.
The move came as New York-based Morgan Stanley, which has assets of about US$626 billion, announced higher-than-expected writedowns of US$9.4 billion on subprime and other mortgage related debt.
In its statement, the Federal Reserve said that the approval of the CIC stake came after the Chinese investment bank offered assurances that its investment will be passive.
“CIC has stated that it does not propose to control or exercise a controlling influence over Morgan Stanley,” it said. “The Board has concluded that CIC would not acquire control of, or have the ability to exercise a controlling influence over, Morgan Stanley.”
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique