Taiwan legislators are demanding that Mega, in whose parent the government owns a 17 per cent stake, provide full accounting details relating to a $670m loan to TPG Newbridge in 2006. TPG used the loan to acquire an 8 per cent stake in Taishin Holdings, one of the country's biggest financial services groups.
The deal was typical of those made by foreign investors who flocked to Taiwan in 2006 and 2007 to take advantage of a wave of government-led bank consolidations. Private equity investors alone committed $5.8bn in several deals last year.
Taiwan's domestic banking industry sucked in much of this investment, with several global private equity firms striking deals. They were attracted by hopes of strong growth, amid the backdrop of an expected sea-change in cross-Strait relations with China.