Taiwan Financial Holding Co’s (台灣金控) planned acquisition of Kuo Hua Life Insurance Co (國華人壽) remains bottlenecked over legal barriers involving personnel hiring, Taiwan Financial chairwoman Susan Chang (張秀蓮) said yesterday.
“We cannot pursue the acquisition any further unless we find a solution to the personnel issue,” Chang told a media briefing.
The government-owned financial group has sought to acquire the troubled life insurer, which has been under the receivership of the Financial Supervisory Commission since August 2009.
The acquisition hit a snag over whether Kuo Hua employees should enjoy benefits and compensation equal to that of Taiwan Financial staffers, who earn their qualifications after passing civil service exams.
“Without seeing a solution on the horizon, we have no intention of doing our due diligence because that is quite expensive,” Chang said.
Taiwan Financial needs its major shareholder, the Ministry of Finance, to approve personnel hirings, share releases, procurements and other matters.
Personnel and other legal obstacles make it unlikely that the group would embark on a merger or acquisition unless it involved another national enterprise, Chang said.
The bottleneck means that the Financial Supervisory Commission must later this week extend Kuo Hua’s receivership for the second time, since the previous extension is set to expire next month.
Taiwan Financial, the nation’s largest financial institution by loans and deposits, posted a net income of NT$7.39 billion (US$252.08 million) last year, 9 percent higher than its target, company statistics showed. Total assets reached NT$4.2 trillion, up 2.2 percent from a year earlier.
The Bank of Taiwan (台灣銀行), the group’s banking arm, contributed NT$7.13 billion in net income, or 94 percent, the data indicated.
The lender plans to upgrade its Chinese representative office in Shanghai between June and August, in a bid to tap into the massive Chinese market, bank president Chang Ming-daw (張明道) said.
The state-run lender signed a cooperation memorandum with Bank of China (中國銀行) last month to help it expand in China, Chang Ming-daw said.
The Bank of Taiwan will focus on serving Taiwanese business interests in China through Bank of China’s branches and offices in the short and medium-term and aims to open its own subsidiary in the long run, he said.
Meanwhile, Bank of Taiwan Securities (台銀證券) chairman Fortune Ju (朱富春) said the brokerage firm has no plans to expand across the Taiwan Strait in the foreseeable future because China remains cautious about opening the market to foreign firms.
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