Fri, May 23, 2014 - Page 14 News List

CTBC Financial posts tidy profit

CLOSING CHAPTER:A nine-year saga of shady deals and deposed tycoons ended with complete divestment from Mega Financial and a total of US$372m in profit

By Crystal Hsu  /  Staff reporter

CTBC Financial Holding Co (中信金控) shares gained 1.34 percent to close at NT$18.83 yesterday in Taipei trading — stronger than the TAIEX’s 1.21 percent rise — one day after the conglomerate announced a hefty profit after divesting from state-run Mega Financial Holding Co (兆豐金控).

The announcement put an end to a controversial nine-year investment effort plagued by an insider trading scam that led to the removal of former CTBC vice chairman Jeffrey Koo Jr (辜仲諒), son of the conglomerate’s founder Jeffrey Koo (辜濂松).

“As of May 20, the company had sold all 1.76 billion shares it owned since 2006 in Mega Financial as required by the Financial Supervisory Commission [FSC],” CTBC said in a statement.

Altogether, the disposal generated NT$11.25 billion (US$372.62 million) in profit that has been reflected in investment and dividend income over the past years, the company said by telephone without supplying cost figures.

The Mega investment dates back to a government-initiated financial consolidation effort in 2006 when CTBC Financial acquired a total stake of 15.6 percent in Mega Financial through different subsidiaries. It also once held four seats on the board of directors.

CTBC Financial offloaded 3.9 percent of its shares in Mega Financial in 2007 after a regulator’s ruling that bars major investments in industrial peers without the intention of an acquisition or merger.

Last year, the Taiwan High Court sentenced Jeffery Koo Jr to nine years and eight months in prison for the illegal purchase and profit-taking of shares in Mega Financial through a Hong Kong-based company called Red Fire.

Jeffery Koo Jr is seeking to overturn the sentence with the Supreme Court and has limited his links with the group to a role as chairman of the CTBC Charity Foundation.

The global financial crisis of 2008 and Europe’s debt problems delayed the share disposal, as financial shares plunged to unbearable levels. The profit came after booking Red Fire benefits and losses, CTBC Financial said.

The bank-focused conglomerate recently moved its headquarters from Taipei’s prime Xinyi District (信義) to its Nangang District (南港), though it has yet to reach a solution with the Taipei City Government on how to handle the Novel Hall (新舞台) adjoining the old office building.

CTBC Financial intends to sell the theater along with the old office building, but had to put off the auction indefinitely after the government declared the medium-sized performing arts center a cultural heritage.

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