Next Media Group’s (壹傳媒集團) deal to sell its media outlets in Taiwan may run aground after the Financial Supervisory Commission (FSC) yesterday voiced its strong objection to financial holding firms controlling media companies.
Jeffrey Koo Jr (辜仲諒), the eldest son of Chinatrust Financial Holding Co (中信金控) founder and chairman Jeffery Koo (辜濂松), and related parties of Chinatrust Financial, cannot have control over companies in both sectors, said Jean Chiu (邱淑貞), deputy director-general of the commission’s Banking Bureau, citing the principle of “separation of banking and commerce.”
“Koo Jr and family will have to reach a decision very soon detailing how they intend to uphold the principle,” Chiu said by telephone.
Last month, Koo Jr inked a memorandum of understanding with Next Media Group to buy the Hong Kong-listed firm’s Chinese-language Apple Daily, Taiwan Sharp Daily, Next Magazine and Next TV for NT$17.5 billion (US$600 million).
The financial regulator made known its stance after Koo Jr, chairman of the Chinatrust Charity Foundation, paid a visit to the commission earlier yesterday to resolve potential regulatory resistance.
Koo Jr, who has teamed up with Formosa Plastics Group (台塑集團) chairman William Wong (王文淵) and a Singapore-based private equity fund in the buyout attempt, is expected to hold an investment meeting today and is scheduled to sign a definitive agreement, as well as all other necessary legal documentation, with Next Media on Saturday.
“The commission will adopt a strict reading of the laws governing financial holding companies and qualifications for major shareholders to uphold the principle of separation [of banking and commerce] and prevent a concentration of power,” Chiu said.
While Koo Jr and his father own only 7 percent of Chinatrust Financial, lower than the 10 percent regulatory threshold to be classified as “major shareholders,” the Koo family and its related parties actually have majority control of the conglomerate’s boardroom, Chiu said.
It is therefore inappropriate if the same parties also control, operate, or represent media firms because it would render the nation’s financial stability vulnerable in the event of a scandal or cyclical volatility, she said.
“The Koo family must address those concerns,” Chiu said. “Assurance by Chinatrust Financial that it will not provide funding to Koo Jr is not enough.”
The commission will not turn a blind eye if the Koo family seeks to circumvent the separation rule through other means, Chiu said, adding that Koo Jr had promised to brief the public on the matter in the next few days.
The anti-media monopoly alliance raised similar concerns yesterday, saying that Koo Jr had been involved in financial scandals and was unfit to run a media corporation.
One of the financial scandals in which Koo was involved was Chinatrust Financial’s flawed bid for rival Mega Financial Holdings Co (兆豐金控) in 2006 — known as the Red Fire Case (紅火案), after the name of the offshore company used to conduct the illegal transaction. He had evaded an arrest warrant and hid in Japan for two years before returning to Taiwan in 2008. He was the vice chairman of Chinatrust Financial at the time.
Chen Hsiao-yi (陳曉宜), organizer of the alliance, said Koo Jr was not fit to run a media business because he had been sentenced to nine years in jail by the Taipei District Court in 2010 for the illegal takeover bid for Mega Financial in violation of the Securities Exchange Act (證券交易法) and the Banking Act (銀行法).
Koo’s case is under appeal.
Tropical Storm Gaemi strengthened into a typhoon at 2pm yesterday, and could make landfall in Yilan County tomorrow, the Central Weather Administration (CWA) said yesterday. The agency was scheduled to issue a sea warning at 11:30pm yesterday, and could issue a land warning later today. Gaemi was moving north-northwest at 4kph, carrying maximum sustained winds near its center of up to 118.8kph and gusts of 154.8kph. The circumference is forecast to reach eastern Taiwan tomorrow morning, with the center making landfall in Yilan County later that night before departing from the north coast, CWA weather forecaster Kuan Shin-ping (官欣平) said yesterday. Uncertainty remains and
SEA WARNING LIKELY: The storm, named Gaemi, could become a moderate typhoon on Wednesday or Thursday, with the Taipei City Government preparing for flooding A tropical depression east of the Philippines developed into a tropical storm named Gaemi at 2pm yesterday, and was moving toward eastern Taiwan, the Central Weather Administration (CWA) said. Gaemi could begin to affect Taiwan proper on Tuesday, lasting until Friday, and could develop into a moderate typhoon on Wednesday or Thursday, it said. A sea warning for Gaemi could be issued as early as Tuesday morning, it added. Gaemi, the third tropical storm in the Pacific Ocean this typhoon season, is projected to begin moving northwest today, and be closest to Taiwan on Wednesday or Thursday, the agency said. Today, there would likely
DISRUPTIONS: The high-speed rail is to operate as normal, while several airlines either canceled flights or announced early departures or late arrivals Schools and offices in 15 cities and counties are to be closed today due to Typhoon Gaemi, local governments announced last night. The 15 are: Taipei, New Taipei City, Taoyuan, Tainan, Keelung, Hsinchu and Kaohsiung, as well as Yilan, Hualien, Hsinchu, Miaoli, Chiayi, Pingtung, Penghu and Lienchiang counties. People should brace for torrential rainfall brought by the storm, with its center forecast to make landfall on the east coast between tonight and tomorrow morning, the Central Weather Administration (CWA) said. The agency issued a sea warning for the typhoon at 11:30pm on Monday, followed by a land warning at 11:30am yesterday. As of
CASUALTY: A 70-year-old woman was killed by a falling tree in Kaohsiung as the premier warned all government agencies to remain on high alert for the next 24 hours Schools and offices nationwide are to be closed for a second day today as Typhoon Gaemi crosses over the nation, bringing torrential rain and whipping winds. Gaemi was forecast to make landfall late last night. From Tuesday night, its outer band brought substantial rainfall and strong winds to the nation. As of 6:15pm last night, the typhoon’s center was 20km southeast of Hualien County, Central Weather Administration (CWA) data showed. It was moving at 19kph and had a radius of 250km. As of 3pm yesterday, one woman had died, while 58 people were injured, the Central Emergency Operation Center said. The 70-year-old