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Mega's union takes aim at the FSC

The Mega International Commercial Bank (兆豐國際商銀) labor union yesterday said that it lodged accusations of jobbery committed by the Financial Supervisory Commission (FSC) with prosecutors.

The accusations refer to alleged preferential treatment for Chinatrust Financial Holding Co (中信金控) during a hostile takeover of larger rival Mega Financial Holding Co (兆豐金控).

"We think the commission has failed to exert its authority of oversight thoroughly in ruling in favor of the private conglomerate," union president Tsai Chiu-far (蔡秋發) said in a telephone interview.

The FSC should demand Chinatrust sell its remaining holding in Mega Financial "right away" because of the failure of the takeover plan, rather than grant the company an open-ended grace period on the pretext of preventing a Mega share selloff, Tsai added.

The development comes as the financial regulator struggles with other controversies.

FSC Vice Chairperson Susan Chang (張秀蓮) and two other senior officials face investigation over allegations that the regulator was involved in malpractice in its detached handling of the Rebar Group, whose fugitive chairman is accused of embezzling NT$70 billion (US$2.1 billion).

Chinatrust Financial commands an 11.6 percent share of Mega Financial and four out of 15 board seats following the mandatory disposal of a 3.9 percent stake, a punitive measure for the firm's misconduct during the takeover attempt.

Tsai and representatives from the National Federation of Bank Employee Unions (銀行員工會全國聯合會) will meet with FSC Chairman Hu Sheng-cheng (胡勝正) on Wednesday.

In response, Chang, who is also spokesperson for the financial regulatory body, said: "The union has the freedom to file a lawsuit, and we will stick to our decision-making procedures."

The FSC last month required Chinatrust Financial to tender plans on how to deal with its remaining stock holding, Chang said.

The regulator would allow a reasonable period of time for the company to produce the plan, she said, without elaborating.

Meanwhile, the bankers union federation will hold a protest on Sept. 8, two years after a similar event, in protest over what it calls poorly designed second-stage financial reforms. The federation expects some 10,000 bank employees to join the protest, Tsai said.
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