A preliminary review found that none of the major 44 shareholders at Primus Nan-Shan Holding Co — which plans to acquire a 97.57 percent stake in Nan Shan Life Insurance Co (南山人壽) — are Chinese nationals, Vice Minister of Economic Affairs Huang Jung-chiou (黃重球) told a legislative session yesterday.
“After looking into the company’s application documents [submitted on Jan 12th], the ministry has preliminarily excluded the possibility that the holding company is China-funded,” Huang said.
Several of the stakeholders at China Strategic Holdings Ltd (中策集團), which has a 80 percent stake in Primus Nan-Shan, are dual Hong Kong-UK nationals, but none of them are Chinese citizens, Huang told reporters on the sidelines of the legislative session.
PHOTO: WANG MIN-WEI, TAIPEI TIMES
The Ministry of Economic Affairs’ (MOEA) Investment Commission, however, will request that the Mainland Affairs Council’s (MAC) offices in Hong Kong or Macau to verify the nationality of shareholders before extending regulatory approval, he said.
Huang said he expects the commission to begin a comprehensive review of the application after Primus Nan-Shan submits the additional documents requested by the Financial Supervisory Commission (FSC) and the Council for Economic Planning and Development.
The ministry would also consider sub-reviews by other agencies such as the Council of Labor Affairs and the central bank, he said.
The government will approve or reject the acquisition within “two-month’s time,” Huang said.
Chinese Nationalist Party (KMT) legislator Lu Shiow-yen (盧秀燕) yesterday cast doubt on the MAC’s ability to review the eligibility of the new shareholders, citing a lack of financial expertise.
“Do you think they [the council] are capable of launching such an investigation overseas?” she said.
Huang did not reply.
Lu said that regulators have encountered a dilemma because they have found no strong footing to approve or disapprove the deal.
Nan Shan employees, however, remain opposed to the new buyer.
Hundreds of the life insurer’s agents staged a protest outside the legislature yesterday morning.
The protesters complained about what they said was the new buyer’s lack of commitment to settling labor disputes.
They chanted “boycott Primus [Financial Holdings Ltd]/China Strategic,” urging the legislature to say no to the new buyer conglomerate.
In his report to the legislature, FSC Chairman Sean Chen (陳冲) reiterated the considerations the commission would keep in mind as it reviewed the acquisition application — the buyer’s commitment to safeguarding policyholders’ and employees’ rights, its insurance expertise and its financial strength.
In October, the consortium led by Primus Financial and China Strategic agreed to acquire American International Group (AIG) Inc’s 97.57 percent stake in Nan Shan for USS$2.15 billion.
The offer represented a 7.5 percent premium on AIG’s asking price of US$2 billion.
A month later, China Strategic agreed to relinquish its 30 percent stake in Nan Shan to Chinatrust Financial Holding Co (中信金控) in exchange for a 9.95 percent stake in the Taiwanese financial service provider.
The legislature’s economic committee yesterday passed a resolution that the economics ministry should also take into account the Hong Kong-based consortium’s earlier commitments to Nan Shan stakeholders and employees.
The consortium earlier promised major Nan Shan stakeholders that it would not sell its stake “within seven years” of the buyout, and that the rights of Nan Shan’s 38,000 employees and 4 million insured would be protected.
The fulfillment of these commitments must be considered in addition to the controversy over the possibility of funding from China, the economics committee said.
However, the FSC said such a legislative resolution may not be feasible because it violates articles in the Company Act (公司法) that say no limits may be placed on shareholders’ transfer of stake, said Wu Chung-chuan (吳崇權), deputy director of the commission’s insurance bureau.
The commission said it hoped the consortium could demonstrate its commitment to managing the life insurer for a long period of time.
ADDITIONAL REPORTING BY JASON TAN
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