| Summary: | 碩士 === 國立臺灣科技大學 === 財務金融研究所 === 98 === This paper is a case study delving into the subprime mortgage crisis triggered by the U.S. real estate market collapse in the Second Quarter of 2008 that erupted into a global stock market debacle. The crisis caused the local REITs fund to plummet far below its net value. In light of which, faced with the problems of a bearish economic environment, increasing maintenance costs of the old fund investment building, and decreasing lease space occupancy and rental rates, Mr. Shiaw, manager of the Shinkong No. 1 Real Estate management firm – New Light International Co., Ltd., started to evaluate the possibility of upgrading fund profitability through the incorporation of Chungshan Building REAT into the Shinkong No. 1 REITs investment portfolio.
Finally, Mega Bank, a Shinkong No. 1 trustee institution won the auction at a price of NT$3.802 billion; the sale of the Shinking Life Insurance Chungshan Building Real Estate Asset Trust (REAT) set two new milestones in the local real estate market. On one hand, it was the first REAT maturity auction sale ever held in the country; on the other hand, the auction buyer was Shinkong No. 1. The sale was the first Real Estate Investment Trust Fund (REITs) acquisition in the country realized through an open auction sale.
Since the investment of Shinkong Life Insurance in Shinkong No. 1 amounted to 21% of the latter’s shares, and thus it constitutes a beneficiary of Shinkong No. 1. Moreover, the Chungshan Building REAT (a considerable 56.4%) owned by Shinkong Life Insurance are all subordinate principals and interest earnings for appropriation; hence, the Financial Supervisory Commission found the sale questionable due to conflict of interests and demanded further management. On July 20, 2009, the Financial Supervisory Commission amended the Instructions on the Implementation of Internal Control and Audit Systems of Real Estate Investment Trust and Real Estate Asset Trust Commissioned to the Services of Trustee Companies, thereby imposing more stringent regulations on the transaction methods between related parties of Real Estate Asset Trust (REAT) and Real Estate Investment Trust Fund (REITs).
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