Taiwan halts US$32.2 million investment by Hong Kong firm with 'extreme deep connections' to Beijing on security grounds
The largest property development project in Taipei has been halted, after Taiwan's ministry of economic affairs blocked a key investor citing national security concerns.
Hong Kong-listed Nan Hai Corporation had bid through a wholly-owned subsidiary, Nan Hai Development, along with Malaysian property developer Malton Berhad to develop a property connecting metro stations, office buildings and shopping malls near the Taipei railway station.
In a statement on Wednesday, the ministry said a deal review committee had found Nan Hai "has extreme deep connections" with mainland China and that it "could be easily influenced by mainland policies". It has stopped the consortium led by Nan Hai Development from depositing NT$1 billion (US$32.2 million) as down payment for the project.
The project, first announced in 2006, had failed to attract eligible bidders in five previous attempts because of the huge investment commitment it requires " NT$60 billion. The total cost of Taipei's landmark 101 tower, for instance, was NT$58 billion.
The ministry said Bermuda-based Nan Hai was controlled by Chinese citizens and could be easily influenced by Beijing. Yu Pun Hoi, 61, the company's chairman, is a media mogul. Publicly available information shows he founded print and online media company HK01 in 2016. Before that, he acquired US-based political news website DuoWei News in 2009 and the Hong Kong-based tabloid Ming Pao in 1990.
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Yu, who controls Nan Hai with a 59.25 per cent stake through Dadi Holdings Limited, also holds research titles at prestigious mainland Chinese universities Peking University and Tsinghua University.
The Taipei Times reported on December 28 last year that the consortium had won the project and its bid was favoured by authorities in Taipei. The report also said Nan Hai was to invest NT$60 billion in the project.
In a filing with the Hong Kong stock exchange in December, Nan Hai said it and its subsidiary had been deemed eligible by Taipei's city government to proceed with the bidding process.
Yu Pun Hoi, the chairman of Bermuda-based Nan Hai Corporation. Photo: Alamy Live News alt=Yu Pun Hoi, the chairman of Bermuda-based Nan Hai Corporation. Photo: Alamy Live News
Rating agency Moody's has rated Nan Hai as "B1". In a review last month, analysts said the company had "diversified business operations, including a profitable property development business and cinema operations". They also noted constraints on its credit profile due to moderate debt leverage, caused by a fast expansion in business.
On Thursday, Taiwanese media Liberty Times quoted authorities as saying they might scrutinise other investments made by Nan Hai in Taiwan and abort investment approvals if they found any national security concerns. The company has stakes in Taiwan-based Sunny Bank and Taiwan Dadi Cinema.
The company did not respond to a request for comment.
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This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
