TAIPEI, June 16 (Reuters) - Sinopac’s $340 million sale of its U.S. unit to Cathay General Bancorp will not be approved by the Taiwan financial regulator if Sinopac does not submit additional satisfactory paperwork to the watchdog, a source with the regulator said.
The regulator’s request throws the first major sale of a Taiwan-owned banking unit to a U.S. bank in jeopardy as the deadline to close the deal draws near.
Cathay and Sinopac Financial Holdings are under pressure to complete the deal as it has been a year since Cathay said it would acquire Sinopac’s U.S. unit.
Los Angeles-based Cathay received approval from the U.S. Federal Reserve in March with a deadline to close the deal early next week.
“We have asked them to provide additional paperwork. If they don’t do that, they automatically forfeit the deal,” a Financial Supervisory Commission (FSC) official told Reuters, who asked not to be identified.
Sinopac needs to explain the full “terms of the agreement” in a satisfactory way, said the official, declining to elaborate.
A spokesman for Sinopac said the company would submit the additional paperwork “soon” and hoped the deal can be closed.
The FSC suspended a review of the acquisition application earlier this month, according to a Sinopac statement, which did no provide further details.
Cathay did not reply to questions from Reuters via email. (Reporting by Faith Hung; Editing by Jacqueline Wong)