China-based Taiwanese business-people still have a long way to go before they can get the necessary permits to raise funds on the local stock market to finance their factories in China, a legislator said yesterday.
Many Taiwanese companies, which own plants in China, have been expressing strong interest in offering shares to local investors, owing to the difficult and costly process of selling shares in China, Democratic Progressive Party (DPP) Legislator Chiu Tai-san (邱太三) said at a press conference yesterday.
Chiu said the main obstacle was the government's slow revision of related laws.
"We will give them [China-based Taiwanese businesspeople] a warm embrace if they decide to come back to Taiwan and raise capital here," said Fortune Ju (
Under current regulations, the nation's central bank banned overseas companies with more than 20-percent ownership by local firms from channeling capital raised here out of the country.
With the restrictions in place, the DPP legislator said more than 100 Taiwanese companies have hesitated in submitting their share-issuance applications.
To solve the problem, a dozen local companies, including Pou Chen Corp (
Fubon Securities Corp (
Chiu has been pushing for a revision to related laws, including the Statute Governing the Relations between the People of Taiwan Area and the Mainland Area (兩岸人民關係條例) in an attempt to assist China-based Taiwanese companies get the money they need to fund their Chinese factories, while transferring the money they earned there back to Taiwan. Chiu's revision proposal has been sent to the Cabinet for discussion.
During the conference yesterday, Onar Paper Co (彥武紙業), a leading Malaysian paper manufacturer headed by an overseas Taiwanese, said it is planning to issue Taiwan Depositary Receipts (TDR) on the Over-the-Counter market.
"Active share trading is one of the main reasons," said Frank Lee (
With initial capital of NT$600 million, Onar is scheduled to issue TDRs in June next year. If it succeeds, Onar will be the first company offering TDRs on the Over-the-Counter market.
Among the overseas companies that have sold TDRs are Singapore-based Medtecs International Corp (美德向邦) and ASE Test Ltd (福雷電子), as well as Mustek Ltd (萬宇科技), which is the biggest computer company based in Africa.
Companies with minimal initial capital of NT$1 billion and NT$200 million are qualified to apply for the share offering on the TAIEX and the Over-the-Counter market, respectively.
Due to foreign institutional investors' complaints about the cap on capital outflow, the Central Bank of China has partly relaxed the restrictions in August, allowing foreign companies with local holdings lower than 20 percent to transfer capital overseas. But at the same time the central bank has required those companies not to remit the capital raised here to China.
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