Wed, Oct 18, 2006 - Page 11 News List

Fubon denies insider trading report

By Amber Chung  /  STAFF REPORTER

Fubon Financial Holding Co (富邦金控), the nation's sixth-largest financial group, yesterday denied local newspaper reports that its life insurance unit was under investigation for alleged insider trading in Hsinchu International Bank (新竹商銀) shares.

"The report is absolutely groundless," Fubon Financial said in a statement released yesterday.

The Chinese-language Com-mercial Times reported yesterday that the Taiwan Stock Exchange (TSE) found that Fubon Life Assurance Co (富邦人壽) bought Hsinchu International shares on the morning of Sept. 29, hours before before the announcement of Standard Chartered Bank's outright acquisition in the afternoon.

The report said the TSE suspected Fubon Life of involvement in insider trading and has handed over the probe results to prosecutors for further judiciary investigation.

Fubon Financial said in its statement that the TSE also denied the allegations in the newspaper's report.

Because Fubon Life Assurance controlled about a 7 percent share of Hsinchu International's stock and had three seats on the bank's board of directors, under Taiwan securities regulations it was illegal for Fubon to trade the Hsinchu International shares within 12 hours of any major announcement, such as the sale to Standard Charter.

The Financial Supervisory Commission said on Monday that it found that the volume of allegedly abnormal trading totaled up to 40 million shares -- with a valued of about NT$400 million (US$12.4 million) -- prior to the British bank's acquisition announcement on Sept. 29.

Fubon Financial said yesterday that it and its subsidiaries did not trade Hsinchu International shares after being advised of Standard Chartered's acquisition attempt on Sept. 22.

Fubon then signed an agreement to sell its holdings in Hsinchu International to Standard Chartered, according to the statement.

More importantly, Fubon Financial said it made its last purchase of Hsinchu International shares on Sept. 1 and stopped buying after that date because the share price exceeded Fubon's target price ceiling, the statement said.

Pressured by the newspaper report, Fubon Financial shares dropped in morning trading.

This story has been viewed 2998 times.
TOP top