Hundreds of investors yesterday staged a protest in front of newly merged Fengshan Credit Coope-rative (鳳山信合社) in Kaohsiung County, urging the credit unit's buyer to return the capital stock of their shares.
"The stock investments, whose market value turned negative [after the credit unit went bankrupt], are our life savings," a female protestor told reporters during the protest.
The demonstrators urged Chinatrust Commercial Bank (
But Chinatrust, a banking arm of Chinatrust Financial Holding Co (
"There's no legal footing that binds Chinatrust to repay such share losses," the bank's spokesman Vanney Cho (
Before the acquisition deal closed, Fengshan Credit Cooperative's net assets had moved into negative territory with NT$1.86 billion in debt, leaving the credit unit's shares worthless, Cho said.
The acquisition contract signed between Chinatrust and the Central Deposit Insurance Corp (CDIC, 中央存保), which took over the credit unit's stewardship after it defaulted, further stipulates that Chinatrust is not obliged to help recover the share losses, Cho added.
In early April, the CDIC took over Fengshan, which has capital of NT$300 million, and reported a 50 percent non-performing loan (NPL) ratio as of March, after Fengshan posted negative net assets of NT$1.9 billion.
Officials at the CDIC weren't available for comment yesterday.
In early July, the CDIC auctioned off the debt-ridden Feng-shan for NT$1.1 billion to Chinatrust. Chinatrust outbid six other competitors at that time and expected the deal would help increase its number of branches within the next five years.
Amid the protests yesterday, Chinatrust successfully completed the acquisition deal, officially taking over management of Fengshan from the CDIC and boosting the bank's branches to 111 from 101, according to a written statement released by the bank.
Chinatrust will relocate six of Fengshan's 10 Kaohsiung-based branches to northern Taiwan in the next three years, the bank said.
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