ChinaTrust may sue AIG over Nan Shan Life sale

AIG agreed to sell 97.57 percent of its shares in Nan Shan to a consortium led by Hong Kong's Primus Financial Holdings for US$2.15 billion in mid-October, which, according to ChinaTrust spokesman Wu Yi-kuei was lower than the bid made by ChinaTrust.

In addition to bidding more for Nan Shan, ChinaTrust also agreed to accept the conditions set down by the local life insurer's union, Wu said. AIG's rejection of more favorable conditions has led ChinaTrust to consider suing the financially troubled American insurance giant.

“AIG has apparently reneged upon common practice in international corporate mergers by ignoring ChinaTrust's better offer,” Wu said.

The American insurer's public relations arm in Taiwan declined to comment on the potential lawsuit Monday, saying only that it needs to gain a better understanding of the matter.

Meanwhile, Minister of Economic Affairs Shih Yen-shiang said Oct. 15 that the government will investigate whether the Hong Kong-based Primus has any Chinese shareholders who hold sway in the group.

Shih said the deal is still being reviewed by the Ministry of Economic Affairs (MOEA).

“If we find that the consortium has any influential Chinese shareholders as its members, we will refuse to approve the sale (of Nan Shan to Primus),” he said.

Under Taiwan's regulations, the Nan Shan transaction must first be examined by the MOEA's Investment Commission and then sent to the Financial Supervisory Commission for final approval.

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