China Strategic Holdings and Primus Financial Holdings, the Hong Kong funds that have battled stiff political opposition since last autumn to the completion of their US$2.15 billion takeover of AIG's Taiwan unit Nan Shan Life, now face uncertainty over whether they can keep their Taiwanese investment partner.
The Hong Kong bidders, widely accused by Taiwanese nationalists of being backed by mainland money, struck a deal last November to sell 30 per cent of Nan Shan to Taiwan banking group Chinatrust Financial Holding, adding strong local credentials to the controversial buyout.
Their agreement with Chinatrust expires next Friday. Two people close to the Taiwanese financial firm said it was still undecided whether to extend it.
Because mainland companies are not allowed to buy Taiwanese financial firms, the island's Ministry of Economic Affairs has dragged its feet on making a ruling while continually asking China Strategic and Primus to resubmit information on their sources of funds.
One person close to Chinatrust said the banking group would wait until the last minute to decide whether to stay in the bid consortium because it was in the dark about what Taiwan's regulators would do.
Chinatrust, which failed in its bid to buy the whole of Nan Shan last summer, is not planning another independent tilt at Nan Shan, the person added.
'Relations with China Strategic are very warm. But because we do not know what the regulators will say, that puts a big question mark over whether we [will] extend the agreement.'