Lawmakers from across party lines yesterday urged the Financial Supervisory Commission (FSC) to reject the planned acquisition of Nan Shan Life Insurance Co (南山人壽) by a local consortium because of concerns about the major shareholder.
Questions were raised as the financial regulator mulled its decision on the latest share transfer plan after blocking the first attempted sale of the insurer in August last year on concerns about the would-be buyer’s long-term commitment and ability to increase capital.
Chinese Nationalist Party (KMT) Legislator Lo Shu-lei (羅淑蕾) said the commission should reveal how the new buyer group, Ruen Chen Investment Holding Co (潤成投資), met the escrow fund requirement.
Ruen Chen inked an agreement with US insurance giant American International Group Inc in January to buy AIG’s 97.57 percent stake in Nan Shan for US$2.16 billion in cash. Ruen Chen is 80 percent owned by the Ruentex Group (潤泰集團), with the remaining 20 percent held by Pou Chen Corp (寶成工業), a local footwear maker.
The commission asked Ruen Chen to demonstrate its financial clout by setting up a NT$30 billion (US$1.04 billion) escrow fund with cash or equivalent assets at an approved bank.
The commission recently said Ruen Chen filed extra documents as instructed, without elaborating. Financial Supervisory Commission Chairman Chen Yuh-chang (陳裕璋) said earlier that the agency would reach a decision in the first half of this year.
“If Ruen Chen created the escrow fund with borrowed money, the fee and interest expenses will put pressure on its finances later,” Lo told a public hearing yesterday.
The group could then channel Nan Shan’s funds to cover its bank loans, straining the insurer’s financial health and endangering the rights of employees and policyholders, Lo said.
Nan Shan Life, a local unit of AIG, has about 40,000 employees and 4 million policyholders.
Non-Partisan Solidarity Union Legislator Kang Shih-ju (康世儒) questioned the honesty of Ruentex Group chairman Samuel Yin (尹衍樑), saying Yin holds US citizenship and was involved in financial scandals involving former KMT treasurer Liu Tai-ying (劉泰英).
“The commission should add an honesty test to its review and stand by the principle of industry and financial sector separation,” Kang said.
The commission should suspend the review until Yin is given the opportunity to prove his character is beyond reproach, Kang said.
Democratic Progressive Party Legislator Su Chen-ching (蘇震清) voiced concern about the possible involvement of Chinese capital in because both Ruentex and Pouchen have businesses in China.
The commission has said it would ensure any buyers are committed to the company long-term, are professionally competent and have sufficient funding to meet future capital needs. In addition, Ruen Chen must also pledge to safeguard the rights of existing employees and policyholders and follow rules regarding capital sourcing.
EXTRATERRITORIAL REACH: China extended its legal jurisdiction to ban some dual-use goods of Chinese origin from being sold to the US, even by third countries Beijing has set out to extend its domestic laws across international borders with a ban on selling some goods to the US that applies to companies both inside and outside China. The new export control rules are China’s first attempt to replicate the extraterritorial reach of US and European sanctions by covering Chinese products or goods with Chinese parts in them. In an announcement this week, China declared it is banning the sale of dual-use items to the US military and also the export to the US of materials such as gallium and germanium. Companies and people overseas would be subject to
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) founder Morris Chang (張忠謀) yesterday said that Intel Corp would find itself in the same predicament as it did four years ago if its board does not come up with a core business strategy. Chang made the remarks in response to reporters’ questions about the ailing US chipmaker, once an archrival of TSMC, during a news conference in Taipei for the launch of the second volume of his autobiography. Intel unexpectedly announced the immediate retirement of former chief executive officer Pat Gelsinger last week, ending his nearly four-year tenure and ending his attempts to revive the
WORLD DOMINATION: TSMC’s lead over second-placed Samsung has grown as the latter faces increased Chinese competition and the end of clients’ product life cycles Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) retained the No. 1 title in the global pure-play wafer foundry business in the third quarter of this year, seeing its market share growing to 64.9 percent to leave South Korea’s Samsung Electronics Co, the No. 2 supplier, further behind, Taipei-based TrendForce Corp (集邦科技) said in a report. TSMC posted US$23.53 billion in sales in the July-September period, up 13.0 percent from a quarter earlier, which boosted its market share to 64.9 percent, up from 62.3 percent in the second quarter, the report issued on Monday last week showed. TSMC benefited from the debut of flagship
TENSE TIMES: Formosa Plastics sees uncertainty surrounding the incoming Trump administration in the US, geopolitical tensions and China’s faltering economy Formosa Plastics Group (台塑集團), Taiwan’s largest industrial conglomerate, yesterday posted overall revenue of NT$118.61 billion (US$3.66 billion) for last month, marking a 7.2 percent rise from October, but a 2.5 percent fall from one year earlier. The group has mixed views about its business outlook for the current quarter and beyond, as uncertainty builds over the US power transition and geopolitical tensions. Formosa Plastics Corp (台灣塑膠), a vertically integrated supplier of plastic resins and petrochemicals, reported a monthly uptick of 15.3 percent in its revenue to NT$18.15 billion, as Typhoon Kong-rey postponed partial shipments slated for October and last month, it said. The
RSS