Brokers said the sale was certain to weaken Nan Ya's share price when trading resumed next week.

The commission said in a statement that Formosa had submitted the application on Friday.

Shares in Nan Ya, one of Taiwan's top two private-sector industrial firms, stood at T$42 on Friday.

The sale is expected to be approved early next week.

The sale follows another recent move by Formosa to raise cash. In January, Formosa group chairman Wang Yung-ching and president Wang Yung-tsai each mortgaged 12 million Formosa Plastics shares from their personal holdings.Group officials denied the group had any fund problem, saying the planned sales were merely a result of Formosa buying too many Nan Ya shares in a rights issue in early February.

"During the rights issue in February, some Nan Yashareholders failed to pay for their shares..., and so Formosa Plastics, the largest shareholder of Nan Ya, took all those shares," a group executive said by telephone.

Formosa Plastics currently has close to 240 million shares in Nan YaThe executive, who declined to be identified, said the group chairman and president's fund-raising moves in January were not for the group's operations but for personal use. He declined to elaborate.

News reports said the group leaders raised the funds to finance Formosa's proposed US$3 billion power plant project in China. Taiwan's government, which bans direct investment in rival China, has said it will not allow the group to invest in a power plant on the mainland.

The reports said Formosa did not give up its power project in China and had transferred its shareholding right to an American associate.

Wang Yung-ching has confirmed the group had transferred its stake in the proposed plant to a foreign consortium but declined to identify the consortium involved.