The Financial Supervisory Commission (FSC) yesterday said it would make a decision in the first half of this year on a local consortium’s plan to acquire American International Group Inc’s (AIG) Taiwan unit, Nan Shan Life Insurance Co (南山人壽).
Financial Supervisory Commission Chairman Chen Yuh-chang (陳裕璋) said the commission has asked Ruen Chen Investment Holding Co (潤成投資), a buyer group created for the planned acquisition, to file more documents by March 24 on its major shareholders and financial position.
“We will make a decision on the case in the first half [of this year],” Chen told lawmakers at a Finance Committee meeting.
Ruen Chen, comprised of supermarket operator Ruentex Development Co (潤泰新), cement and chemical fiber maker Ruentex Industries Ltd (潤泰全) and shoemaker Pou Chen Corp (寶成工業), is awaiting commission approval to buy AIG’s 97.57 percent stake in Nan Shan for US$2.16 billion.
The commission rejected AIG’s first sale attempt in August last year on concerns over the former potential buyer’s long-term commitment and capital increase capability.
Chen dismissed challenges over potential conflicts of interest, saying his former association with Ruentex Group chairman Samuel Yin (尹衍樑) was aboveboard and would not affect the review.
“Yin and I were not classmates at graduate school” at National Taiwan University, Chen said, adding that he met Yin twice while serving as chairman of First Financial Holding Co (第一金控) over a syndicated loan to finance an urban regeneration project.
The commission will stand by the five principles when conducting the review, under which Chen must also pledge to safeguard the rights of existing employees and policyholders, demonstrate professional management competence and follow rules governing capital sources.
Huang Tien-mu (黃天牧), director-general of the commission’s Insurance Bureau, said the commission needed to know if the acquisition would have negative impact on Ruentex and Pou Chen and how they will maintain equity stability.
The buyer also has to show that all funds are obtained legally and major executives meet management competence requirements, Huang said.
Meanwhile, the commission, seeking to help rein in soaring property prices, plans to tighten risk controls on home loan operations, Chen said.
“The commission is studying the possibility of raising risk -factors on home loans for investment purposes,” he said. “Home prices are too high in parts of the country.”
In addition, the commission will step up inspections on banks with heavy mortgage lending, but will not introduce a universal safety standard, Chen said.
“The commission cares more about whether loans are overly concentrated in a specific industry and whether price evaluations are carried out fairly,” the chairman said.
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