Primus Financial Holdings Ltd. and China Strategic Holdings Ltd. , which American International Group Inc. (AIG) selected to buy its Taiwan life insurance unit for US$2.15 billion, said Wednesday they will send a revised application to Taiwan regulators on the acquisition “hopefully next week.”
Taiwan’s Investment Commission last week turned down the consortium’s application to acquire the unit, Nan Shan Life Insurance Co., saying the group didn’t provide enough specifics about its funding sources or investors.
Critics of the deal have expressed concerns that the consortium is backed by mainland Chinese money. Taiwan law prohibits mainland Chinese investment in the island’s financial institutions. Foreign companies are seen as Chinese-owned if Chinese investors have a 30% stake in them.
Robert Morse, chairman and co-chief executive of Primus, said the group has been working “hand in glove” with regulators to provide all the additional information requested on the group’s business plan, sources of funding and capital structure.
The consortium has also been spending a lot of time with management, employees and agents to assure them about their sources of funding and their intention to make a long-term investment in Taiwan, Morse said.
Another factor complicating the acquisition’s approval is the consortium’s agreement to sell a 30% stake in Nan Shan Life to Chinatrust Financial Holding Co. in exchange for a 9.95% stake in Chinatrust. That deal, announced only weeks after Primus and China Strategic won the bid for Nan Shan Life, sparked concerns about the consortium’s long-term commitment.
Morse and China Strategic Chief Executive Raymond Or emphasized Wednesday the two transactions are separate and the resubmitted Nan Shan Life application won’t include anything about Chinatrust.
“Chinatrust is a secondary transaction and not in the picture yet,” said Or, adding regulators haven’t yet asked for additional information about Chinatrust.
Regulators could choose to approve the acquisition of Nan Shan Life by the consortium, and either approve or not approve the Chinatrust transaction, Morse said. Chinatrust’s network would complement Nan Shan Life’s business nicely, he said, but it isn’t necessary.
