Trading of Hsinchu Bank shares comes under investigation

Prosecutors said they are investigating if insider trading in shares of Hsinchu International Bank (新竹國際商銀) took place before Standard Chartered Plc announced a general offer.

"Prosecutors have started investigations into whether there was any insider trading involved in transactions of Hsinchu International Bank shares," said Lin Jinn-tsun (林錦村), spokesman for the Taipei District Court Prosecutors' Office, said yesterday, confirming a Chinese-language Economic Daily News report, which didn't cite anyone.

Prosecutors are still waiting for the results of an initial investigation from the Financial Supervisory Commission as a reference for the probe, Lin said, declining to give more details.

Hsinchu Bank spokesman Leo Liang (梁俊武) said yesterday he "isn't aware of any insider trading and prosecutors haven't come to the bank's office for investigation."

The share price of Hsinchu Bank jumped 33 percent and its trading volume surged more than 80 times in the three weeks before the takeover was announced on Sept. 29, according to Bloomberg data.

Shares of Hsinchu Bank declined NT$0.1 to close at NT$23.3 on the stock exchange yesterday.

Standard Chartered on Sept. 29 offered to buy Hsinchu for NT$24.5 per share, valuing the bank at NT$40.5 billion (US$1.2 billion).

The offer has been accepted by 95.4 percent of shareholders.

Fubon Financial Holding Co's (富邦金控) life insurance unit isn't under investigation by regulators for insider trading in Hsinchu Bank shares, company president Victor Kung (龔天行) said on Oct. 17, denying a newspaper report.

Fubon Life Assurance Co (富邦人壽) is being probed after allegedly buying shares in Hsinchu Bank on the same day Standard Chartered was reported to be planning to acquire the lender, the Commercial Times reported on Oct. 17. Standard Chartered confirmed the bid the same day.

Fubon Life Assurance is a shareholder of Hsinchu and has a director on the lender's board. The unit is barred by law from buying or selling the company's shares within 12 hours of an announcement, Kung said.