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Taishin Financial plans to sue two SinoPac execs

"We have shown enough patience ? but there was no clarification by last Friday's deadline ... [and] since there was no satisfactory result by 2pm today, before this press conference, we decided to take legal action."

Julius Chen, president of Taishin Financial

Taishin Financial Holding Co (台新金控) announced yesterday that it would file a lawsuit against two SinoPac Financial Holdings Co (建華金控) executives after SinoPac failed to make a clarification and apologize for providing information to foreign investors that Taishin said twisted facts.

"We have shown enough patience ? but there was no clarification by last Friday's deadline," Julius Chen (陳淮舟), president of Taishin Financial, told a press briefing yesterday.

"Since there was no satisfactory result by 2pm today, before this press conference, we decided to take legal action," Chen said.

The company said it would file a lawsuit for libel by today at the earliest against SinoPac president Paul Lo (盧正昕) and spokesman Kevin Peng (彭康雄).

They allegedly sent incorrect information about Taishin to SinoPac's overseas shareholders by e-mail in the middle of last month.

Earlier this year Taishin expressed an interest in merging with SinoPac, which was in talks with International Bank of Taipei (IBT, 台北商銀).

While SinoPac's chairman Richard Hong (洪敏弘) apparently favored forming an alliance with Taishin, Lo appeared to prefer a merger with IBT. This difference of opinion has prevented a deal so far.

To seek foreign shareholders' support, Peng and Lo allegedly sent two e-mails on April 18 and April 19, saying that Taishin chairman Thomas Wu (吳東亮) was not sincere about a merger offer and Hong had no legal right to disclose a letter from Taishin.

In a report entitled "IBT vs Taishin: facts vs disinformation," SinoPac said that Taishin had never made any offer.

"The letter about the terms and conditions came in a draft format, without a signature. It failed to constitute an official offer from Taishin for SinoPac's BoD [board of directors] to act upon," the report read.

Hong told the media about the letter at a press conference last month.

At the time, Lo and Peng said that there were no legal grounds to disclose such a premature and tentative letter from Taishin, especially when the letter had requested confidentiality.

They also said Hong's unilateral announcement at his press conference had been inappropriate.

IBT has accumulated 15 percent of SinoPac's shares so far and will seek the chairmanship in SinoPac's board meeting next Tuesday, which made the bank a realistic option for SinoPac, Lo and Peng have said.

Faced with the possibility of a lawsuit, Peng said yesterday that SinoPac valued peace and would continue to communicate with Taishin to reach agreement on the matter.

He did not elaborate.

"The likely merger with SinoPac is over," Chen said yesterday, shying away from discussing future plans.

Taishin holds about NT$200 million worth of SinoPac shares through its banking arm, Taishin International Bank (台新銀行), the company has said.

It said the investment was made for short-term capital gains.
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