Legislative Yuan: No Primus transfers

This was part of the resolutions made by lawmakers at the economic committee session held to discuss the US$2.15 billion acquisition deal concluded by the Primus-Nanshan Holding (UK), which was jointly set up by Primus Financial Holdings Ltd. and China Strategic Holdings Ltd., both based in Hong Kong.

The economic committee came up with a spate of screening criteria for the Invest Commission under the Ministry of Economic Affairs and other relevant authorities to follow in screening the Nan Shan acquisition deal by Primus-Nanshan.

Among the criteria are the appropriateness of major shareholders (those holding a stake of over 10 percent), the overall capability of the management team, pledges by the new management to safeguard the interests of over 30,000 Nan Shan employees and over 4 million clients, checking to see if there is any Chinese capital involved in the acquisition case, and participation by all the 18 members of the Investment Commission to screen the case.

　　In addition, the Investment Commission should report its screening results to the economic committee of the legislature.

　　In fact, regulators and legislators in Taiwan are concerned that the buyers, who set up Primus-Nanshan Holding (UK) Co. for the transaction, are backed by funding from China.

In response, Vice Economic Minister Hwang Jung-chiou said yesterday that

The government's approval of AIG's proposed sale of its local unit will depend on the source of funding for the transaction.

There is no indication that funds from China are being used, Hwang said at the economic committee session of the legislature yesterday. He said the government will conduct more checks overseas on the origin of the funds, as companies in which mainland investors have a total holding of 30 percent or more to take controlling stakes in its industries won't be allowed to invest on the island.

“Any changes in the future to the shareholding structure of any of the buyers must be made known to the regulator,”Hwang said.

　　Authorities here aim to verify the source of funding by the end of March and complete the approval process by the first half of 2010, Hwang said.

The application will be vetted by Taiwanese officials, including those from the central bank and labor council, Hwang continued.

　　Primus and China Strategic in December reiterated they have no funding from mainland investors.

Emile Chang, deputy executive secretary of the investment commission at the economics ministry, said today that the Financial Supervisory Commission has asked the buyers for more information. The buyers must ensure the origin of funds complies with Taiwan's rules, the commission said in a report to legislators.

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