Chinatrust Financial sells 440m shares in Mega Financial

Chinatrust Financial Holding Co (中信金控), owner of the nation's biggest credit card issuer, said it sold 440 million shares of Mega Financial Holding Co (兆豐金控) on Thursday, completing a share sale required by the nation's financial regulator.

Chinatrust Financial was required by the Financial Supervisory Commission to offload a 3.9 percent stake in larger rival Mega Financial by July 20 after being found to have been involved in illegitimate transactions overseas during its previous takeover bid for Mega Financial, the nation's third-biggest financial group by assets.

Chinatrust Financial still controls 11.6 percent of the state-controlled Mega Financial. The company won't say what it plans to do with its remaining shares in the bigger rival, Bloomberg reported yesterday, citing Chinatrust Financial's chief strategy officer Jason Wang (王正新).

"We would give the company more time to dispose of the remaining holding," commission Spokeswoman Susan Chang (張秀蓮) said yesterday.

Since financial holding firms are not allowed to undertake non-takeover investment, Chinatrust Financial will need to get rid of its entire stake in Mega Financial, unless it can demonstrate its ability to proceed with the acquisition plan, Chang said.

Chinatrust Financial began selling the 3.9 percent holding in Mega Financial on the open market in the first quarter.

Chinatrust Financial is expected to book a loss of NT$900 million (US$27.5 million) from the share disposal.

The company declined to confirm the figures.