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Updated Thursday, November 26, 2009 10:50 am TWN, By Janet Ong, Bloomberg

Chinatrust's share sale gets rejected by Taiwan regulator

TAIPEI, Taiwan -- Chinatrust Financial Holding Co. said Taiwan's financial regulator rejected its application to sell 2.5 billion shares at NT$17.74 (55 cents) apiece in a private placement.

The rejection comes after Chinatrust said on Nov. 18 it plans to sell 1.17 billion shares, as part of the placement, to China Strategic Holdings Ltd. in a deal to acquire a 30 percent stake in American International Group Inc.'s Taiwan unit.

China Strategic and Primus Financial Holdings Ltd. last month won a bid, beating Chinatrust, to buy AIG's Nan Shan Life Insurance Co. for $2.15 billion.

“We will discuss with the regulator the reasons for the rejection and resubmit the application with all the information required,” Vanney Cho, a vice president at Chinatrust, said today.

Cho declined to comment on whether the rejection is linked to plans to buy Nan Shan. Chang Ming-daw, director-general at the banking bureau of the Financial Supervisory Commission, didn't immediately answer calls to his mobile phone.

The regulator rejected the application after the company failed to respond to a Sept. 28 request by the bureau for more details of the placement, Chinatrust said in a stock exchange filing today. The financial services company submitted the application on Sept. 4.

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