Taipei, Nov. 14, 2012 (CENS)--The Financial Supervisory Commission (FSC) intervened yesterday (Nov. 13) in the plan of Jeffrey Koo Jr., chairman of Chinatrust Charity Foundation, to buy out Next Media Group, citing the principle for the separation between financial business and industry, a move which has made the materialization of the deal highly uncertain.
Kuei Hsien-nung, director general of Banking Bureau, the FSC, told Koo yesterday that he cannot control, manage, and dominate Next Media. In addition, Koo can only own less than 20% stake in Next Media and cannot represent the buying party to sign contract for the deal with Jimmy Lai, controlling shareholder of Next Media.
Jeffrey Koo Jr. was originally scheduled to sign the contract for the deal with Jimmy Lai this Saturday (Nov. 17). It cannot be predicted whether other major partners, including Wang Wen-yuan, chief executive officer of Formosa Plastics Group, or representative of the Singaporean private equity fund owned by Tsai Yien-min, chairman of Want Want-China Times Group, will replace Koo to sign the contract with Jimmy Lai, or the deal will be aborted.
Kuei Hsien-nung noted that the FSC has concluded that investment by Jeffrey Koo Jr. in Next Media is equivalent to investment by Jeffrey Koo Sr., his father and chairman of Chinatrust Financial Holding, in the media, since the two persons are the same related party.
Kuei note that Koo’s family is the controlling shareholder of Chinatrust Financial Holding, since it owns 7% stake in Chinatrust Financial Holding and over half of the seats on the board of directors of the company. The FSC, said Kuei, hoped that controlling shareholders of financial holding firms don’t control, dominate, and manage media, or become the representative of media. In other words, controlling shareholders of financial holding firms can only own less than 20% in media, cannot possess over half the seats on the board of directors, or become directors of the media.
Chiu Shu-chen, deputy director general of Banking Bureau, pointed out that the FSC insisted on the principle of separating financial business and industries, in order to avoid over-concentration of economic power affecting the healthy management of banks.
(by Philip Liu)
