Regulator scoffs at a `canceled' merger

The Financial Supervisory Commission yesterday overruled Taiwan International Securities Corp's (金鼎證券) announcement on Monday that it would cease its three-in-one merger, insisting that the deal had to proceed.

"We never received any formal application from Taiwan International to revoke the three-way merger before the deal took effect on Feb. 27," commission spokesman Lin Chung-cheng (林忠正) said, after the regulator summoned the brokerage to elaborate.

"Taiwan International's unilateral announcement means nothing to the regulator," Lin said.

"The three-in-one merger must proceed and complete the issuance, transfer and listing of new shares by March 3 as planned," he said.

The brokerage firm had announced on Monday that it would stop the merger with Far East Securities (遠東證券).

It had cited a share sale by Far East's major shareholder and a lack of advance notice of the firm's compensation obligations after its loss of a lawsuit.

Taiwan International claimed that these factors had violated the merger agreement.

The brokerage's sudden announcement was seen as a move to counter a hostile takeover attempt by bigger rival China Development Financial Holding Co (中華開發金控), which reportedly had acquired a shareholding in Far East.

At press time yesterday, Taiwan International said that it was still discussing all possibilities.

These apparently included continuing the three-way merger and holding the transfer of new shares to Far East shareholders, or instead holding a two-in-one merger with First Securities Co (第一證券).