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Bans on Chinatrust lifted after changes made

The Financial Supervisory Commission confirmed yesterday that it had lifted business expansion bans on Chinatrust Financial Holding Co (中信金控) as the company has demonstrated improvements in internal control.

"The results of the ad hoc financial inspection showed that they have made required improvements and are disposing their 3.9 percent holdings in Mega Financial Holding Co (兆豐金控) as required," commission spokesperson Susan Chang (張秀蓮) told a press conference yesterday.

The commission sent an official document on the removal of restrictions to the company on Monday, she said.

The confirmation came after Chinatrust Financial said in a filing to the Taiwan Stock Exchange yesterday that it received the document stating the regulator has scrapped the restrictions on takeover investment, the opening of overseas banking branches and rollout of foreign currency-denominated options products linked to Taiwanese stocks.

Last July, the financial watchdog imposed such punitive measures for the company's misuse of funds during its controversial takeover of larger rival Mega Financial.

The incident led to indictment of three executives of Chinatrust Financial and further investigations into the heir to the Koo family that founds and controls the nation's seventh biggest financial group.

"We expect the removal to facilitate the approval of our investment in Thailand," Chinatrust Financial spokesman Jason Wang (王正新) said by telephone yesterday.

The company said last December it planned to invest US$36.52 million for the next three years in a 49 percent stake in a joint venture with the Government Savings Bank to run a credit card and consumer lending business in Thailand.

Other overseas expansion is being planned, Wang said, without elaborating.

Meanwhile, the company has disposed of 1 percent of its holdings in Mega Financial in the open market.

The remaining shareholding can be liquidated through the issuance of global depository receipts to overseas buyers, the company said.
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