Hong Kong-listed China Strategic said Thursday its application to buy American International Group’s Taiwan unit, Nan Shan Life, had been “returned, not rejected” by the island’s regulators.
The bid for Taiwan’s second largest life insurer, plagued by opposition from Taiwanese residents and claims that it is backed by mainland Chinese investors, suffered a new blow as authorities said it had been turned down.
“We rejected the application last week because some needed papers are missing,” Emile Chang, deputy executive secretary of Taiwan’s Investment Commission, told AFP Thursday.
But China Strategic, whose consortium with Hong Kong-based Primus Financial Holdings agreed last month to pay struggling AIG 2.15 billion US dollars for Nan Shan, insisted its application had not failed. And it reiterated its denials of mainland Chinese backing for the bid.
Raymond Or, vice-chairman and chief executive officer of China Strategic, told a press conference that the application had been returned because of a “difference in their interpretation of the submission requirements”.
“It was not rejected. It was returned,” said Or, who is also the former vice-chairman of Hong Kong’s Hang Seng Bank. “This was not unusual and we should not make a big deal of it,” he added.
“The submissions were handled by our professional accounting and solicitors’ firms. From day one, they had already warned us not to expect the submissions to go through in one take.”
Or said he and Frederick Ma, the company’s chairman and Hong Kong’s former commerce and economic development secretary, would visit the Taiwanese regulators next week to resolve the issue.
The Investment Commission said among the documents it wanted to see was one explaining China Strategic’s plan, revealed this week, to sell 30 percent of Nan Shan to Taiwanese conglomerate Chinatrust Financial.
In return, China Strategic would get a 9.95 percent stake in Chinatrust, which lost out last month in a bid to acquire Nan Shan. Or said that the agreement to grant the stake to former rival Chinatrust was partly due to the Taiwanese community’s strong reaction to the acquisition of an established local brand by an overseas group.
Earlier this month, about 2,000 insurance agents for the local unit of AIG protested outside the headquarters of Nan Shan about its sale to the consortium. Many said they feared for their pensions under the new ownership.
“Taiwanese people’s concerns about their established insurance company falling into the hands of an operator whom they are not familiar with are understandable. That’s why we decided to work with a heavyweight local Taiwanese investor — Chinatrust was not the only company we considered.”
Theories were also circulating that mainland Chinese investors were behind the acquisition.
Taiwan’s laws prohibit mainland Chinese companies and individuals from holding controlling stakes in Taiwanese companies in most industries, including insurance.
“We have repeatedly said that no mainland Chinese investors are involved in the acquisition. AIG only agrees to sell Nan Shan to us after having undertaken a lot of due diligence,” Or said.
He said the partnership was mutually beneficial because the strength of China Strategic and Chinatrust lay respectively in life insurance and bancassurance.
He added that the consortium hoped to eventually take the Nan Shan brand overseas to countries such as Vietnam and China.
With AFP – Hong Kong, Nov 19, 2009