The Financial Supervisory Commission (FSC) said yesterday that it had asked domestic financial institutions to take the initiative and inform clients who have investments issued by, guaranteed by or linked to the bankrupt Lehman Brothers Holdings.
After Taishin Financial Holdings Co (台新金控) and Chinatrust Financial Holding Co (中信金控) announced that they were taking legal action on behalf of investors to seeking compensation from Lehman, the commission also encouraged other firms to follow suit, FSC Vice Chairwoman Lee Jih-chu (李紀珠) told a media briefing yesterday.
“The financial firms should pay the legal fees,” Lee said.
Lee said that local banks’ wealth management divisions had sold Lehman Brothers-related investments to 51,000 retail investors, with Chinatrust Financial selling 20,000.
The Bankers’ Association of the Republic of China (銀行公會) would provide retail investors with any necessary assistance, while the Securities Investment Trust and Consulting Association (證券信託公會) had set up a helpline at 02-2351-5299 for further information, Lee said.
In addition, the commission’s latest statistics showed that domestic banks had invested NT$16.2 billion in Lehman Brothers-related financial products, while the insurance sector had NT$18.5 billion invested and investment trusts and brokerage firms had invested another NT$3.43 billion.
Since it may suffer worse-than-expected losses from its NT$1.8 billion investment in Lehman Brothers, Taishin Financial said it planned to accelerate its proposed sale of three commercial buildings to cover its losses.
“The sales were proposed six months ago in order to liquidate [idle] assets,” company president Lin Keh-hsiao (林克孝) told reporters yesterday.
Originally, the property sales had nothing to do with the company’s potential losses from Lehman Brothers’ bankruptcy, but “will now be utilized to cover the losses,” Lin said.
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