The Financial Supervisory Com-mission yesterday announced that it had taken over the debt-ridden China United Trust and Investment Corp (
"The commission appointed the Central Deposit Insurance Corp (CDIC,
The regulator had to step in as the financial institution failed to solicit investors for its self-bailout measure and its net book value had plunged to minus NT$319 million (US$9.6 million) by the end of last month, Hu said.
It had only a liquid capital of NT$350 million on Thursday and continued to lose trust funds, which makes it difficult to maintain normal operations, he added.
During the takeover period, all of the company's authorities -- directors, supervisors and the shareholder meeting -- will be suspended. An auction will be arranged in five to seven months, the commission said.
Founded in 1970, China United has 15 branches nationwide and incurred a net loss of NT$246 million last year.
With more than 45,000 customers, the firm has a savings business of NT$64 billion, compared with the overall banking sectors' savings of NT$19 trillion. It has granted loans totaling NT$46 billion.
To avoid a bank run, Hu assured the public that China United's trust fund is 100 percent guaranteed by the government and that all the business' operations would remain normal under the state-run Bank of Taiwan's management.
"Customers need not withdraw their trust funds unless it is necessary, or interest losses will occur," he said.
Regulations stipulate that shares of China United be suspended from trading on the local bourse for 10 days from today to April 9, and will be limited to cash settlement for 20 days, from April 10 to April 29, before being delisted on April 30.
Shares of China United rose 4.9 percent to close at NT$2.68 on the Taiwan Stock Exchange yesterday.
China United is the fourth problematic financial institution the regulator has taken over within the past four months.
The government's restructuring fund took over the management of Taitung Business Bank (
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