Insurance News
- Ping An poised to buy stake in fund firm
Date: 22-Mar-2007 Sources: (Shenzhen Daily)
PING An (Group) is in final talks to buy a controlling stake in a small domestic fund company, which would make it the country's first insurer to own a mutual fund firm, sources close to the talks said yesterday.
The trust and investment arm of Ping An (Group), China's second-largest life insurer, has been in talks with Shenzhen-based Jutian Fund Management Co. for about six months, the sources said.
Hong Kong and Shanghai-listed Ping An, also headquartered in Shenzhen, is seeking to buy a 35 percent stake in the fund company from Jutian Securities, one of the country's oldest stock brokers, for several tens of millions of yuan, they said.
Jutian Securities' operations were suspended by the China Securities Regulatory Commission late last year for the misuse of client funds.
Jutian Securities had been talking to several major domestic financial firms about a potential sale of its assets, including the stake in Jutian Fund, to repay its brokerage clients, according to local media reports.
'Jutian Securities needs money to solve its financial problems, while Ping An has been looking for a suitable target for an acquisition in the fund sector for quite some time,'said one fund industry source.
'This could be a very sensitive deal, however, as we so far have never seen regulators approve an insurance company buying into a fund company, directly or indirectly,'the source added.
An executive close to Ping An said that the insurer's own brokerage arm, Ping An Securities, was in talks with a U.S. financial firm last year about a potential partnership to set up a fund management joint venture.
The negotiations stalled, however, due mainly to difficulties in winning government approval, which usually would require at least one year for a new Sino-foreign fund venture, the executive said.
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