The purchase of CLSA brokerage by CITIC Securities from Credit Agricole has hit a bump in Taiwan. The US$1.25 billion sale is said to be resisted by regulators as it creates a situation wherein a Chinese company would be owning a Taiwanese entity located in Taiwan.
About one year after CITIC Securities had enteed into an agreement with Credit Agricole as to the purchase of the brokerage firm, one of its key requirements would be the stamp of approval from Taiwan's regulatory firm Finance Supervisory Commission.
According to one of the individuals knowledgeable of the transaction, Taiwan contributes less than 5% to the overall revenues of CLSA and the disapproval of the local regulators would not torpedo the deal or affect the final purchase price.
A refusal of approval by the FSC would be slap on the latest deal forged between Taiwan and China as to increasing cross-straits partnerships. This would certainly create a new wedge between the two nations divided by the Formosa Strait.
One FSC official with direct knowledge of the matter, "Taiwan does not allow Chinese securities companies to buy a securities firm here. The most they can own is a a 10 to 15% stake for an unlisted brokerage. If CLSA sells its Taiwan business to a Chinese company, that will not meet the regulation."
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