Regulator to boost stake in New China Life
(Shanghai Daily)
Updated: 2007-08-03 09:07
Updated: 2007-08-03 09:07
Orient Group Incorporation Co sold its 96.29 million shares in New China Life to the insurance protection fund at 5.99 yuan apiece, the Heilongjiang Province-based Orient Group said in a statement to the Shanghai Stock Exchange yesterday.
The China Insurance Regulatory Commission, which runs the fund, will hold about 30.554 percent of New China Life after the deal.
The insurance regulator earlier bought 22.53 percent from three shareholders of New China Life for about 1.6 billion yuan, according to media reports.
The regulator used money from China's eight-billion-yuan insurance protection fund to buy the stake in the country's fourth-biggest insurer.
It marks the first time the regulator has used the money to buy a stake in insurers. The kitty is aside to help policy holders when an insurer goes bankrupt or is faced with huge financial problems.
The insurance regulator's use of the fund to gain a controlling stake of New China Life is widely regarded as a severance move on Guan Guoliang, the former chairman of the Beijing-based insurer, who the regulator is investigating for alleged misuse of almost 13 billion yuan.
The shareholders from whom CIRC bought shares have a close relationship with Guan, who has showed resistance in cooperating with regulators.
The stake deal is aimed to end Guan's involvement in the insurer.
New China Life, set up in 1996, has three foreign investors: Zurich Financial owns 18.9 percent, Meiji Life Insurance Co 4.5 percent and International Financial Corp 1.5 percent. The balance is held by 12 domestic companies.
Orient Group gained a return of 308.89 million yuan from the transaction and will use it mainly in its mining sector, the company said.
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