Chinatrust to offload Mega stake

Chinatrust Financial Holding Co (中信金控), the nation's sixth-largest provider of financial services by assets, announced yesterday that its board had approved the sale of a 3.9 percent stake in Mega Financial Holding Co (兆豐金控).

Chinatrust Financial was ordered by the Financial Supervisory Commission last July to offload the holdings -- about 440 million shares -- by July 20, after the company's banking arm was found to have purchased the shares through a flawed process, which included misusing funds and improperly benefiting a third party.

Under the principles of transparency, diversity and market stability, Chinatrust Financial will sell the shares through the open market, in after-hours big-block trading, after-hours auctions and through the issuing of global depositary receipts (GDRs), the company said in a filing to the Taiwan Stock Exchange yesterday.

As the issuance of GDRs will take more time to complete, Chinatrust Financial will seek to use the first three channels to sell the shares, company spokesman Jason Wang (王正新) said at a press conference yesterday.

The share disposal, which will be managed by JP Morgan Chase Bank, will begin on Friday at the earliest, the company said.

Former Chinatrust Financial chief financial officer Perry Chang (張明田) was detained by prosecutors last November, followed by chairman Jeffery Koo Jr (辜仲諒) stepping down, because of the controversial Mega Financial attempted takeover.

Last month, Jeffrey Koo Jr was placed on the nation's most-wanted list after he refused to return to Taiwan from abroad for questioning by prosecutors.

SHARE TRANSFER

Wang said yesterday that the company had applied to transfer 100 million shares of Mega Financial, which accounts for 0.9 percent of the company's total shares.

To avoid depressing the Mega Financial share price, the shares will mainly be sold to institutional investors with "proper timing," Wang said.

Wang did not elaborate on what "proper timing" meant and only said that the company will observe the market and determine the best time and method to offload the shares.

Shares of Mega Financial rose 1.51 percent to close at NT$23.55 on the Taiwan Stock Exchange yesterday. Shares of Chinatrust climbed 2.71 percent to NT$28.45.