Tong Zhengzhang, deputy director of the Banking Bureau, said in response to Cathay Gold's major shareholder buying shares in Family Mart.

I will examine it from different aspects, and if I have any doubts, I will ask for an explanation.

(Photo by reporter Wang Menglun)

[Reporter Wang Menglun/Taipei Report] Cathay Pacific Gold’s major shareholder, Wanbao Development, bought nearly 20% of Family Mart’s shares. We explain today that this is an issue of public concern. We will examine the "suitability" of Cathay Pacific's major shareholders, including: "professionalism", "financial capacity", "risk differentiation" and "whether there is improper concentration of economic power".

Taishan Company sold nearly 20% of Family Mart's shares to Wanbao Development, the major shareholder of Cathay Financial Holdings. However, it was questioned that it violated the "separation of production and gold". The Financial Supervisory Commission also stated that it would further investigate and asked the major shareholder to explain.

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However, some people in the market questioned that it is Cathay Gold’s major shareholder, not Cathay Gold itself, that acquired the equity of FamilyMart. Why is there still the problem of separation of production and gold?

What is the standard for gold separation?

In this regard, Tong Zhengzhang, deputy director of the Banking Bureau, said that there are three key points in the current regulation of the "separation of production and gold". Qualification review of major shareholders, holding 10% equity of financial holdings or banks, must be reviewed by the Financial Supervisory Commission.

Tong Zhengzhang said that the first and second items are mainly to standardize financial institutions, which is very clear, whether there is or not, double stare; as for the third item is different, it is mainly aimed at the part of major shareholders.

Therefore, regarding the eligibility of major shareholders in this case, the Financial Supervisory Commission will examine four aspects. The first is professionalism. Whether the legal representative sent by the major shareholder has the operating capacity of a financial institution.

The second is financial ability, which cannot be affected by major shareholders' future capital increase in financial institutions and other strengthening business measures due to high leverage.

Furthermore, risk segregation, if finance and industry are related to some extent, risk transmission may affect the sound operation of financial institutions.

The fourth is whether the improper concentration of economic power leads to the allocation of overall social resources and fair competition in industries.

The above are the four red lines for the Financial Supervisory Commission to examine the "substantial shareholder eligibility" of "separation of production and gold".

However, the major shareholder of Cathay Pacific has already bought the shares of FamilyMart. If it does not meet the standards of the Financial Supervisory Commission, what should be done?

Is it possible to liquidate the holdings?

In this regard, Tong Zhengzhang emphasized.

We will examine it from different aspects, and if we have any doubts, we will ask the major shareholders to provide an explanation; for example, the second point mentioned above refers to financial capabilities. Shareholders must put forward a plan to strengthen financial resources to show that he is qualified.

"Major shareholders in the financial industry must have the confidence of the competent authorities." Tong Zhengzhang said, of course, in the future, not every major shareholder's investment will be reviewed by the Financial Supervisory Commission, but it must be "significant", which depends on the individual case .

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