Taiwan’s Investment Commission said on Dec. 22 that Malaysia’s IOI Properties Group Bhd’s (KLSE: IOIPG) application for purchasing Ting Hsin International Group’s shares of the Taipei 101 has been received but more investigation needs to be carried out for making sure that no Chinese investment is involved.

“By law, Ting Hsin also needs to file a separate application on the case but so far, we have yet heard anything from the company,” said Emile Chang (張銘斌), executive secretary for the commission.

Chang made his remarks during a press conference, and was referred to Ting Hsin’s planning to sell its 37.1% shares of Taipei 101 to IOI Properties Group at US$837 million. By the Article 10-2 of the Statute for Investment by Foreign Nationals, the seller and the buyer are required to file separate applications at the same time, when the deal concerns share transfers. IOI filed the application on Dec. 19, Chang said.

When the deal was first made front page story two weeks ago, Taiwan’s government and lawmakers said they will do whatever it takes to stop the deal because of a policy to keep the authorization of the building in a Taiwanese hand.

“The case will not go anywhere before we receive all necessary documents and applications,” Chang said.

Quoting IOI’s application, Chang confirmed that the entire deal will be carried out in Taiwan, while there was a public concern that Ting Hsin and IOI may try to carry out the deal in a foreign country to avoid potential taxes. While awaiting Ting Hsin’s application, Chang said, the commission will also request IOI to offer more evidence and documents to prove that no Chinese investment is involved.

Although the deal costs US$837 million, IOI only explained that the company will only need to pay US$23 million first but there was no related information for the rest of the amount.

“IOI only mentioned that the company will finance the rest of the amount from local banks but there are no detail plans for that part in the application. For that, we acquire more explanation,” Chang said.

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Ting Hsin International Group, one of the major shareholders of the parent company of Taipei 101, which has been involved in the nation’s food safety crisis since this Fall, is in something of a predicament. Its plan to sell its shares of the skyscraper to Malaysia’s IOI Properties Group Bhd was declined by the Taiwanese government, due to a policy that the major shareholder of the building should not be a foreign investment.

Ruentex (TPE: 2597) Group Chairman Samuel Yin (尹衍樑), who was a close friends to the Wei family who owns Ting Hsin and was commissioned for speaking on behalf of Ting Hsin since the crisis, said earlier that Ting Hsin is planning to establish a “food safety fund” of US$100 million when the check of the deal is deposited, but Yin’s remarks became questionable as of now.

Ting Hsin’s wishful thinking to withdraw from Taipei 101 was declined by Taiwan’s government heads and lawmakers, not because of its selling shares to foreign investments but a concern that the authority of the landscape will fall in a foreign hand.

The Ministry of Finance estimated that Ting Hsin could have made profits of at least US$636 million but the group will only have to pay a tax amount of approximately US$33 million.   Regarding a public concern that Ting Hsin may have carried out the deal in a foreign country to avoid necessary taxes to Taiwanese government, the ministry, however, assured that Ting Hsin will definitely have to pay necessary taxes no matter where the deal is completed.

“We have yet received any application forms from Ting Hsin regarding this deal as of now. By law, we will complete necessary reviews within two weeks once we receive the application,” said Emile Chang (張銘斌), executive secretary for the Investment Commission.

Minister of Finance Cheng Sheng-ford (張盛和) said that the government is more than willing to become the major shareholder for the building but the major obstacles for the plan will be whether Ting Hsin would sell its shares to the government and how much the shares will be sold. Chang said that Ting Hsin has never contact with any government bodies regarding potential deals so far.

Meanwhile, Central Bank Governor Perng Fai-nan (彭淮南) said that “it is better for Taiwanese people to be the boss for the building.”

“We should stop it by following related laws. If there is no law for this, we can see what we can do to stop it,” Perng said.

Financial Supervisory Commission Chairman William Tseng (曾銘宗) said that in addition to Ting Hsin, Cathay Financial Holding Co (TPE: 2882), CTBC Financial Holding Co (TPE: 2891) and Shin Kong Financial Holding Co (TPE: 2888) are all shareholders for Taipei 101, but by law, there is a cap for the amount of shares to be possessed by these companies.

Tseng, however, would not confirm the information that Cathay is considering to sell its 7.73% shares to the government.

An anonymous high ranking person from Cathay said that the company “will support the government’s policy on the issue.” He also implied that Cathay will not sell its shares at a relatively cheaper price if the deal is done because “Cathay also needs to take care of the company’s shareholders’ benefits, profits and interests.”

For CTBC, its vice chairman Jeffrey Koo Jr. (辜仲諒) said that he never learned any information of any possibility for the company to sell its shares of Taipei 101 to the government.

The government currently possesses a total of 44.35% shares of Taipei 101 and is seeking chances to purchase another 7% to become the major shareholder. In addition to Ting Hsin’s 33.17% and the government’s 44.35%, Cathay has 7.73%, CTBC has 6.12%, Shin Kong has 3.25% and Taichun owns another 1.12%.

In response, Ting Hsin said that selling its shares to IOI does not mean the authority of Taipei 101 will fall to a foreign investment at the same time. On the contrary, Ting Hsin said, it will help elevate Taipei 101’s brand name.

Ting Hsin said that the government will remain the major shareholder after the company sells its shares to IOI. Also, business was not the only concern for Ting Hsin to carry out the deal with IOI, because IOI is an experienced international property-managing firm and will help elevate Taipei 101’s brand name.

Regarding a public concern that Ting Hsin may carry out the deal in a foreign country to avoid potential taxes, Ting Hsin said that the company will follow necessary laws and pay necessary taxes. The company admit that selling its Taipei 101 shares was one of the moves to resolve the financial predicament the company is experiencing but the deal also reflected the fact that Taipei 101’s value is highlighted.

IOI also issued a statement and said that the company will follow Taiwan’s laws if the deal is done and the company becomes the shareholder of Taipei 101, while the company has no intention to go for the tug of war for the authority. It is also IOI’s hope to help the building become Asia’s and the world’s landscape. IOI said that the deal was merely business because the company is confident at Taiwan’s future economic development. IOI, meanwhile, is a listed company in Malaysia so there is no way for the company to deal with any illegal business, foreign or domestic.

“Our intention to invest Taipei 101 has nothing to do with politics, needless to mention any potential harm against Taiwanese people. On the contrary, we hope to become a friendly investor for Taiwan with all our hearts,” IOI said.

The Ting Hsin International Group, headquartered in Taipei and Tianjin, was established by Wei Ing-chou (魏應州), Wei Ying-jiao (魏應交), Wei Ying-chung (魏應充) and Wei Ying-xin (魏應行) in 1958. As natives from Yungching Township, Changhua County, the Weis also own Wei Chuan, FamilyMart, and Master Kong instant noodles as subsidiary brand names under Ting Hsin.

Ting Hsin purchased 33.17% of Taipei 101’s shares and became the major shareholder for the building since 2009.

In November 2013, Wei Ying-chung was indicted on charges of fraud as part of an investigation into the 2013 Taiwan food scandal. In October 2014, prosecutors launched a separate investigation into the 2014 Taiwan food scandal, that alleged a unit of Ting Hsin International Group over sale of tainted cooking oil.

Investigators discovered that Cheng-I Food Co, a subsidiary company of Ting Hsin, was alleged for mixing animal feed oil with cooking oil and then selling it to the public.

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