Fri, Sep 22, 2006 - Page 11 News List

FSC to retain some bans on Chinatrust Financial's business

By Amber Chung  /  STAFF REPORTER

The Financial Supervisory Com-mission (FSC) yesterday retained some of its bans on Chinatrust Financial Holding Co's (中信金控) future business plans, until the result of an ad hoc financial inspection is released less than six months from now.

The bank was penalized by the regulator in July for its poor internal controls while conducting a takeover bid of larger rival Mega Financial Holding Co (兆豐金控).

The FSC is scheduled to conduct an inspection of Chinatrust Financial's internal controls soon, commission spokeswoman Susan Chang (張秀蓮) said at a press briefing yesterday.

The regulator will not decide whether to remove bans on the company's investment activities, establishment of overseas branches and trading of foreign currency-denominated options linked to Taiwan's stocks until then, Chang said.

On top of that, Chinatrust Financial is required to provide monthly investment reports over the next six months.

The FSC said it agreed to permit Chinatrust's fundraising plans as long as they are intended to improve the company's financial structure, rather than to fund any takeovers.

In July, the FSC meted out several punishments to Chinatrust Financial for investment irregularities.

The FSC agreed to scrap some of the restrictions after the company's board reimbursed Chinatrust Commercial Bank (中國信託商銀) US$30 million for losses incurred during the controversial investment, it said. Other remedial actions included payment of a NT$10 million fine and Jeffrey Koo Jr's (辜仲諒) resignation.

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