AIG Taiwan unit buyer vows "won’t give up"

TAIPEI (Reuters) – The buyer of AIG’s (AIG.N: Quote, Profile, Research) Taiwan insurance unit vowed on Thursday to continue to try and meet the regulator’s tough demands for approval of the $2.16 billion deal, as workers at the unit held the latest in a series of protests over pension benefits.

“We will not give up” on the acquisition of Nan Shan Life, said C. C. Tsai, chairman of shoemaker Pou Chen (9904.TW: Quote, Profile, Research), part of the buyer group Ruen Chen Investment. He did not make further comment.

The Financial Supervisory Commission (FSC) last week gave Ruen Chen a series of demands to meet before it would consider approving the deal, and reiterated them in a statement late on Wednesday responding to criticism of its handling of the deal.

The demands included having Ruen Chen put T$30 billion ($1.02 billion) in cash or assets into a custodian account for the next decade for possible funding needs.

Ruen Chen will also raise T$10 billion this year for funding requirements, and the FSC also demanded additional paperwork.

An FSC official told Reuters on Thursday that it has yet to receive the paperwork, but didn’t expect it so quickly.

Also among the commitments was an agreement to keep Nan Shan’s sales agents and staff for two years, but that has not solved a long-running dispute over pension benefits that flared again on Thursday, with workers protesting outside the office of one of the companies in the buyer group.

The union has long called for Nan Shan’s 32,000 contract sales workers to be given the same pensions as its 3,200 regular staff, a demand that AIG did not meet.

The union is now taking up its case with Ruen Chen, but the request could cost the buyer an additional 24 percent on top of its purchase price.

“We will continue to make demands on the pension issue until Ruen Chen gives us a satisfactory answer,” said Anita Yang, a union spokeswoman.

About 1,000 sales agents gathered for the protest on Thursday, the union said.

The regulator, acutely sensitive to the fate of Nan Shan’s 4 million policyholders, or one-sixth of Taiwan’s population, has imposed five strict conditions on any buyer of Nan Shan.

The conditions are: fund-raising ability for future operations; a long-term commitment to run Nan Shan; experience in running an insurance business; taking care of employees and policy holders, and funding sources that meet Taiwan regulations.

Ruen Chen is made up of Pou Chen, retailer Ruentex (2915.TW: Quote, Profile, Research) and its property affiliate Ruentex Development (9945.TW: Quote, Profile, Research).

(Reporting by Faith Hung, Lin Miao-jung and Rachel Lee; editing by Jonathan Standing)

AIG Taiwan unit buyer vows "won’t give up"