Fri, Feb 01, 2008 - Page 11 News List

Regulator takes over Asia Trust, auction imminent

LAST STRAW FSC Vice Chairwoman Susan Chang said Asia Trust has been unsuccessful for many years, failing to improve its finances with a capital injection

By Joyce Huang  /  STAFF REPORTER

After being pushed into the red, debt-ridden Asia Trust and Investment Corp (亞洲信託) was officially taken over by the nation's financial regulator yesterday afternoon.

At 3:30pm, the Financial Supervisory Commission instructed the state-run Central Deposit Insurance Corp (CDIC, 中央存保) to assume control of Asia Trust, which had a negative net worth of NT$262 million (US$8.14 million) at the end of last year.

FSC Vice Chairwoman Susan Chang (張秀蓮) said Asia Trust would be placed into CDIC's immediate custody until an auction is held to sell the Taipei-based lender.

"The government's financial restructuring fund may have to pay more than NT$2 billion to sell Asia Trust off," Chang said.

She also said that the figure remains a preliminary estimate.

The CDIC's custody will not impact on the rights of the failed lender's customers and employees, she said.

Founded in 1972, Asia Trust has seven branches nationwide and manages a total trust fund of NT$13.9 billion while giving out a total of NT$7.8 billion in loans, 29 percent, or NT$2.27 billion, of which have soured.

"Some of Asia Trust's board members and management are immediately barred from leaving the country," although no management irregularities have been found, Chang said.

She declined to give any further details.

Asia Trust has been unsuccessful for many years and the last straw before its foreclosure was its recent failure to improve its finances by finalizing a minimum NT$5 billion capital injection, which was requested by the financial regulator, Chang said.

In addition to the takeover of Asia Trust, the CDIC yesterday successfully auctioned off the bad loans of another failed lender, Bowa Commercial Bank (寶華銀行).

Two bad-loan packages, worth NT$18.8 billion and NT$4.1 billion, were respectively sold for NT$2.69 billion to Yuanta Asset Management Co (元大資產管理) and NT$120 million to Liang Jing Co (良京實業).

After three rounds of negotiations, three bidders yesterday failed to close the Bowa Bank auction.

CDIC president Howard Wang (王南華) said the bidder who asked for the lowest compensation from the government to acquire Bowa will be entitled to direct price negotiations with the CDIC today.

"We hope the deal can be closed [today], although the direct price negotiation may extend to two remaining bidders later next week." Wang said.

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