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■ Lee Chin-cheng charged
Prosecutors on Tuesday night charged Lee Chin-cheng (李進誠), a counselor at the Financial Supervisory Commission, with insider trading, a move that makes Lee the first defendant with official status in the probe into the illegal "vultures investor group." Lee was then released on bail of NT$1 million (US$30,000) and banned from leaving the country until the case concludes. The turnabout came after Lee corrected himself and conceded after a 12-hour questioning marathon that he was familiar with another suspect, Lin Ming-ta (林明達). Lee, however, continued to deny any collusion with Lin in the illegal trading of Power Quotient International Co (勁永國際) shares. Lee, a former director-general of the commission's Examination Bureau, resigned from his post in July. Prior to taking the commission post, Lee was a senior prosecutor at the Prosecutors' Office for the High Court. Prosecutors last week also detained Chang Hsi-kuan (張錫寬), a senior employee at the Taiwan Stock Exchange, on suspicion of leaking confidential information to vulture groups to illegally trade Power Quotient shares.

■ Banks plan merger
State-run Taiwan Cooperative Bank (合庫銀行) and Farmers Bank of China (農民銀行) are planning to merge via a share swap to create the country's largest bank by assets, a Chinese-language newspaper said yesterday. Taiwan Cooperative Bank plans to swap each of its shares for 2.5 to 2.7 shares of Farmers Bank based on evaluations of asset quality and stock prices, the newspaper said, citing unidentified sources. The newspaper said both lenders will hold board meetings next week to discuss the merger. A deal is expected to be approved at shareholders' meetings in December, the paper said. Taiwan Cooperative Bank had NT$1.97 trillion (US$58 billion) in assets as of June 30, while Farmers Bank had US$597.9 billion in assets.

■ Nan Ya to sell bonds
Nan Ya Plastics Corp (南亞塑膠), the world's largest processor of materials for pipes and imitation leather, plans to raise as much as US$300 million selling US dollar-denominated bonds as it expands production of petrochemicals. The firm is offering floating-rate notes maturing in five years, Standard & Poor's said, in giving the securities its third-lowest investment grade rating. The bonds, which will be sold by Nan Ya Plastics' Hong Kong unit to circumvent a 20 percent withholding tax in Taiwan, are rated BBB+ by Standard & Poor's. "The ratings on Nan Ya Plastics reflect its leading position in the plastics, polyester fiber and electronic materials industries, as well as its moderate financial profile," Standard & Poor's credit analyst Tony Tsai (蔡東松) said. The ratings also take into account the company's position as a "core member" of the Formosa Plastics Group (台塑), Taiwan's largest industrial concern, Standard & Poor's said.

■ TSMC expected to slide
Taiwan Semiconductor Manufact-uring Co (TSMC, 台積電) will probably report a third-quarter profit slide because of falling prices. Net income for the company probably dropped 14 percent to NT$24 billion (US$710 million) from a year ago, according to the median estimate of 10 analysts surveyed by Bloomberg. Rival United Microelectronics Corp (UMC, 聯電) may report that its profit declined 83 percent to NT$1.9 billion. Consumer spending may be curbed by higher gasoline prices during the Christmas shopping season, according to investor Stuart O'Gorman.

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