Primus Financial Holdings Ltd., whose partnership with China Strategic Holdings Ltd.(0235.HK) to buy American International Group Inc.'s (AIG) Taiwan unit has raised concerns in the island over Chinese involvement, said Wednesday none of the company's investors holds a Chinese passport.

A consortium comprising Hong Kong-based companies Primus and China Strategic won a bid to buy Nan Shan Life Insurance Co. for US$2.15 billion, raising concerns the consortium raised funds from Chinese investors.

Taiwan's laws prohibit Chinese companies and individuals from holding controlling stakes in Taiwanese companies in most industries, including insurance.

Primus also said more than 97% of China Strategic's share capital upon completion of the transaction are from investors that don't hold a People's Republic of China passport, and the funds aren't from China.

China Strategic's existing shares, which will represent less than 3% of total expected share capital upon completion of the transaction, are traded on the Hong Kong bourse, Primus said.

"Throughout the bidding process, we have provided AIG and its advisors with detailed information on Primus Financial and China Strategic's potential shareholders to prove definitively that there are no PRC individuals or PRC-sourced funds involved," Primus said.

While ties between Taiwan and China have improved since the Taiwan's Kuomintang government returned to power in 2008, the two sides have yet to agree on two-way financial supervision, and haven't decided how much they will open their financial services sectors to each other.

Taiwan has opened about 100 sectors to Chinese investments, but has kept major industries such as semiconductors and flat-panels off-limits to Chinese investments.

Financial Supervisory Commission Chairman Sean Chen said AIG told the Taiwan government that it has verified that none of the 45 investors committed to buying the US$1 billion worth of convertible bonds that China Strategic plans to issue for the Nan Shan deal holds a Chinese passport, the Economic Daily News reported Thursday.

-By Perris Lee Choon Siong, Dow Jones Newswires; +8862-2502-2557; perris.lee@dowjones.com