By Ted Chen / Staff reporter The Financial Supervisory Commission (FSC) yesterday said it has not yet received an application by CTBC Financial Holding Co (中信金控) to sell a 3.8 percent stake to China CITIC Bank Corp Ltd (中信銀行), denying speculations that it discussed the matter with its Chinese counterpart in a meeting in Taiwan earlier this week. The commission’s remarks came after a watchdog group raised concerns that the deal, if given regulatory approval, might allow a Chinese entity to gain a board seat on a Taiwanese financial company, giving them access to Taiwan’s Joint Credit Information Center (金融聯合徵信中心), which holds sensitive data on individual and corporate finances. In May, CTBC Financial announced the NT$13.09 billion (US$400.8 million) deal with China CITIC Bank, a subsidiary of Chinese conglomerate CITIC Group (中國中信集團). At that time, CTBC Bank Co (中國信託銀行) had also said it was acquiring CITIC Bank International China Ltd (中信銀行國際中國) through a cash purchase agreement and was investing in a consumer finance joint venture in China. “After acquiring a 3.8 percent stake, CITIC Group would become the third-largest shareholder of CTBC Financial, paving the way for China to exert a tighter grasp on the nation’s financial sector,” said a statement by Economic Democracy Union (經濟民主聯盟), a non-governmental organization that had staged a protest against the commission on Tuesday. There were speculations that the FSC and China Banking Regulatory Commission looked into the matter during the fifth round of financial talks between Taiwan and China, which was held in Nantou County’s Puli Township (埔里) on Monday. Meanwhile, CITIC’s stake acquisition was reduced to 3.4 percent from 3.8 percent, as CTBC Financial’s shares have seen dilution after it acquired Taiwan Life Insurance Co (台灣人壽保險) this year. Speaking at a media briefing yesterday, Banking Bureau Deputy Director-General Jean Chiu (邱淑貞) said that the commission is set to review FSC’s application to make sure the agreement was carried out according to guidelines. Current cross-strait investment guidelines allow Chinese companies to hold up to a 5 percent stake in Taiwanese financial companies. Chiu also said board members of financial institutions do not have access to credit information. “Such data are only released to lenders with the consent of borrowers,” she said. Board members are typically only involved with companies’ management and do not take part in day-to-day operations, she added. Chiu said that the three Chinese banks currently operating in Taiwan, including the Bank of China (中國銀行), have not applied to be a member of Taiwan’s Joint Credit Information Center. Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.
The Financial Supervisory Commission (CTBC Financial to CITIC Bank) denies receiving an application regarding the sale of a 3.8% stake in FSC, nor discussing the matter with its Chinese counterpart. The CTBC Financial to CITIC Bank's denial follows concerns raised by the Economic Democracy Union, who pointed out that the deal, if approved, might allow a Chinese entity to gain a board seat on a Taiwanese financial company, thereby giving them access to Taiwan's Joint Credit Information Centre, which holds sensitive information on individual and corporate finances.