FSC comments on application by Fubon Financial Holding Co. to acquire Jih Sun Financial Holding Co. by tender offer
2020-12-24
The Financial Supervisory Commission (FSC) has duly reviewed the application by Fubon Financial Holding Co., Ltd. ("Fubon Holdings") to acquire Jih Sun Financial Holding Co., Ltd. ("Jih Sun Holdings") by tender offer, and comments as follows:
1. In November 2018, the FSC adopted policy measures and issued legislation aimed at incentivizing business consolidations among financial holding companies and banks. In accordance therewith, a financial holding company or bank that has strong capital adequacy, good management capability, strong ability to expand its global presence, and performs well in fulfilling its corporate social responsibilities may propose an unsolicited acquisition. The FSC's objective is to encourage financial institutions to use M&A deals to expand the size of their business operations, provided that such deals respect market mechanisms, comply with laws and regulations, and serve the interests of the public (i.e. shareholders, employees, and customers), and provided further that such deals are necessary for the sake of business development.
2. After Fubon Holdings filed an application to invest in Jih Sun Holdings by tender offer, the FSC reviewed the application in accordance with the provisions of the "Regulations Governing the Investing Activities of a Financial Holding Company" and within the legally mandated review period agreed to allow Fubon Holdings to initiate a tender offer. Once the tender offer conditions are satisfied, Fubon Holdings will still be required to satisfy all requirements set out in the "Company Act," "Securities and Exchange Act," "Business Mergers and Acquisitions Act," and "Financial Institutions Merger Act," and then duly file an application with the FSC for approval to merge with Jih Sun Holdings.
3. When an application is filed for approval to invest in (including "acquire") a financial holding company or bank, the duration of the review period may be affected by the transaction structure, the applicant's identity, whether all application documents have been submitted in full, and other such factors. If the applicant is an offshore enterprise, or if required application documents have not been furnished in full, the review process usually takes longer. Fubon Holdings is closely supervised by the FSC, and furnished all the documents needed to support its application to invest in Jih Sun Holdings by tender offer. The FSC has reviewed the application in accordance with the provisions of the "Regulations Governing the Investing Activities of a Financial Holding Company" and found that the conditions have been satisfied to initiate a tender offer.
4. Regarding whether mainland Chinese entities have an ownership interest in Capital Target Limited (CTL), a major shareholder of Jih Sun Holdings, CTL, acting in line with the FSC's "Action Plan for Shareholding Transparency," refiled a share ownership report with the FSC in July 2020, and the information therein matched the information set out in the share ownership report that CTL had filed when it applied to the FSC in 2009 for approval to take an equity stake in Jih Sun Holdings. The FSC has asked CTL to provide an explanation regarding questions about its beneficial owners or persons with ultimate control, and continues to investigate this matter. In the future, if it is found that CTL has presented false information in a share ownership report, the FSC will take further actions in accordance with legal provisions.
5. With respect to the application by Fubon Holdings to carry out a tender offer, the FSC has reviewed the application in accordance with the applicable provisions of the "Financial Holding Company Act" to determine whether Fubon Holdings had satisfied the tender offer conditions, not to determine the fit-and-proper of the shareholders of Jih Sun Holdings. Therefore, questions about whether mainland Chinese entities have an ownership interest in CTL is a separate matter that is not directly related to the tender offer in question. Regardless whether the tender offer succeeds, the FSC will fulfill its duty and determine whether mainland Chinese entities have an ownership interest in CTL. If the FSC discovers that CTL gets involved in any specific legal violations, the FSC will take further actions in accordance with the law.
6. With respect to this application by Fubon Holdings, the FSC has already activated the market surveillance mechanism and if the FSC finds that investors have engaged in insider trading the FSC will take further actions in accordance with the law. The success or failure of the tender offer depends on the acceptance rate among Jih Sun Holdings shareholders. The FSC respects the market mechanism. The outcome of this tender offer will thus be decided by the shareholders of Jih Sun Holdings, so the FSC reminds investors to carefully read the tender offer prospectus and fully understand the associated risks.
7. It has reported that the Egmont Group has been looking into Jih Sun Holdings. However, the Egmont Group is an international organization that facilitates cooperation and intelligence sharing to combat money laundering, and does not itself investigate cases. This means that the news report in question was inaccurate.
Contact: Financial Holding Companies Division, Banking Bureau
Tel: +886 (2) 8968-9850
Please direct any questions or comments to: FSC Feedback Mail
1. In November 2018, the FSC adopted policy measures and issued legislation aimed at incentivizing business consolidations among financial holding companies and banks. In accordance therewith, a financial holding company or bank that has strong capital adequacy, good management capability, strong ability to expand its global presence, and performs well in fulfilling its corporate social responsibilities may propose an unsolicited acquisition. The FSC's objective is to encourage financial institutions to use M&A deals to expand the size of their business operations, provided that such deals respect market mechanisms, comply with laws and regulations, and serve the interests of the public (i.e. shareholders, employees, and customers), and provided further that such deals are necessary for the sake of business development.
2. After Fubon Holdings filed an application to invest in Jih Sun Holdings by tender offer, the FSC reviewed the application in accordance with the provisions of the "Regulations Governing the Investing Activities of a Financial Holding Company" and within the legally mandated review period agreed to allow Fubon Holdings to initiate a tender offer. Once the tender offer conditions are satisfied, Fubon Holdings will still be required to satisfy all requirements set out in the "Company Act," "Securities and Exchange Act," "Business Mergers and Acquisitions Act," and "Financial Institutions Merger Act," and then duly file an application with the FSC for approval to merge with Jih Sun Holdings.
3. When an application is filed for approval to invest in (including "acquire") a financial holding company or bank, the duration of the review period may be affected by the transaction structure, the applicant's identity, whether all application documents have been submitted in full, and other such factors. If the applicant is an offshore enterprise, or if required application documents have not been furnished in full, the review process usually takes longer. Fubon Holdings is closely supervised by the FSC, and furnished all the documents needed to support its application to invest in Jih Sun Holdings by tender offer. The FSC has reviewed the application in accordance with the provisions of the "Regulations Governing the Investing Activities of a Financial Holding Company" and found that the conditions have been satisfied to initiate a tender offer.
4. Regarding whether mainland Chinese entities have an ownership interest in Capital Target Limited (CTL), a major shareholder of Jih Sun Holdings, CTL, acting in line with the FSC's "Action Plan for Shareholding Transparency," refiled a share ownership report with the FSC in July 2020, and the information therein matched the information set out in the share ownership report that CTL had filed when it applied to the FSC in 2009 for approval to take an equity stake in Jih Sun Holdings. The FSC has asked CTL to provide an explanation regarding questions about its beneficial owners or persons with ultimate control, and continues to investigate this matter. In the future, if it is found that CTL has presented false information in a share ownership report, the FSC will take further actions in accordance with legal provisions.
5. With respect to the application by Fubon Holdings to carry out a tender offer, the FSC has reviewed the application in accordance with the applicable provisions of the "Financial Holding Company Act" to determine whether Fubon Holdings had satisfied the tender offer conditions, not to determine the fit-and-proper of the shareholders of Jih Sun Holdings. Therefore, questions about whether mainland Chinese entities have an ownership interest in CTL is a separate matter that is not directly related to the tender offer in question. Regardless whether the tender offer succeeds, the FSC will fulfill its duty and determine whether mainland Chinese entities have an ownership interest in CTL. If the FSC discovers that CTL gets involved in any specific legal violations, the FSC will take further actions in accordance with the law.
6. With respect to this application by Fubon Holdings, the FSC has already activated the market surveillance mechanism and if the FSC finds that investors have engaged in insider trading the FSC will take further actions in accordance with the law. The success or failure of the tender offer depends on the acceptance rate among Jih Sun Holdings shareholders. The FSC respects the market mechanism. The outcome of this tender offer will thus be decided by the shareholders of Jih Sun Holdings, so the FSC reminds investors to carefully read the tender offer prospectus and fully understand the associated risks.
7. It has reported that the Egmont Group has been looking into Jih Sun Holdings. However, the Egmont Group is an international organization that facilitates cooperation and intelligence sharing to combat money laundering, and does not itself investigate cases. This means that the news report in question was inaccurate.
Contact: Financial Holding Companies Division, Banking Bureau
Tel: +886 (2) 8968-9850
Please direct any questions or comments to: FSC Feedback Mail
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Update：
2021-02-04