The Financial Supervisory Commission (FSC) yesterday conditionally approved a Taiwanese consortium’s bid to acquire American International Group Inc’s (AIG) local unit, nearly two years after the US insurance giant sought to exit the market.
The conditional approval came after Ruen Chen Investment Holding Co (潤成投資) struck a deal with AIG in January to buy the US company’s 97.57 percent stake in the local subsidiary, Nan Shan Life Insurance Co (南山人壽), for US$2.16 billion. The FSC asked the buyer to put an extra NT$6 billion in a custody account to strengthen capital adequacy
“The FSC decided to conditionally approve the share transfer plan after a prudent review,” the financial regulator said, after rejecting the first application in August last year because of concerns over the previous prospective buyer’s long-term commitment and ability to raise new capital.
Ruen Chen — composed 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) — submitted a written pledge to put all Nan Shan shares into trust to demonstrate its long-term commitment.
The commission said it found the pledge acceptable.
To prove its financial clout, Ruen Chen promised to inject fresh capital of NT$10 billion (US$347.46 million) into Nan Shan by the end of the year and will deposit NT$6 billion in cash as well as extra securities with a custodian bank, the commission said.
Ruen Chen should go through the procedure and submit a statement with a detailed asset breakdown from the custodian bank within two months, it said.
While Ruen Chen will fund the acquisition partly with borrowed money, it has promised to keep bank loans at below 48 percent of the purchase cost and will reduce the debt ratio every year, the commission said.
Further, the commission said it was satisfied with Ruen Chen’s promise to safeguard the rights of existing Nan Shan employees and policyholders — by retaining all employees and keeping their salary and compensation package unchanged for at least two years.
The 48-year-old insurer has about 40,000 employees and 4 million policyholders.
The FSC said the review showed Ruen Chen met rules governing capital sourcing.
As for professional competence, Ruen Chen has tapped former Nan Shan chairman Koay Boon-teik (郭文德) to steer the company again, the FSC said.
In addition, major Ruen Chen shareholders all agree they will not channel Nan Shan funds to their own business interests or make the insurer invest in their shares or other forms of securities, the FSC said.
Ruen Chen also must not ask Nan Shan to buy its real-estate properties or join real-estate development ventures, the commission said, adding that the buyer and Nan Shan should issue a written assurance one month after the share transfer.
Ruentex has business interests in construction and Pou Chen has a stake in a Chinese lender.
Nan Shan yesterday expressed its appreciation for the FSC’s approval.
The life insurance company issued an e-mailed statement saying that the company would cooperate with AIG and Ruen Chen to meet the conditions set by the commission and complete the share transfer as soon as possible.
“The commission’s decision perfectly matches up with the rights and interests of Nan Shan’s policy holders, office employees, sales employees and the company itself,” Nan Shan said in the statement.
The approval would not have any impact on the rights of policy holders or on Nan Shan’s services as a whole, the company said.
Calls made to Ruen Chen chairman Cheng Chuan-tai’s (鄭銓泰) mobile phone went unanswered yesterday.
However, Wedding Lan (藍維鼎), a spokesman for the Nan Shan agents’ union, said that the union could not accept the decision because the approval failed to safeguard employees’ rights and interests.
“As far as our rights are concerned, the commission only considered the Council of Labor Affairs’ opinions. Instead, the commission should have considered the practical commitments that Ruan Chen should give to employees, such as rescinding all legal cases against the company’s sales staff and returning all the reserved funds to staff,” Lan said by telephone yesterday.
The union has not ruled out the possibility of a protest in the near future, while continuing its negotiations with the relevant government agencies, the Nan Shan agents’ union spokesman said.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS