Taishin Financial Holding Co (台新金控) yesterday said it respects the decision of a foreign institutional shareholder to seek international investment arbitration to resolve a decade-old dispute to gain management rights over Chang Hwa Bank (CHB, 彰化銀行).
Taishin Financial said that it received a notification last month of Singapore-based Surfeit Harvest Investment Holdings Pte Ltd’s intent to seek arbitration, with the aim of redressing investment losses caused by a long-running dispute with the government for control over state-run CHB.
The Singaporean company said that its interests as a shareholder were harmed when the Ministry of Finance wrested majority representation on the CHB board of directors from Taishin Financial, and that it intends to seek arbitration based on the terms of the Agreement Between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership, Taishin Financial said in a statement.
“Taishin Financial has more than 20,000 foreign institutional shareholders. While we are not at liberty to explain the actions of our stakeholders; we respect their decisions,” Taishin Financial said.
Surfeit has been in communication with the Ministry of Finance and the Ministry of Economic Affairs since June last year, but the government’s responses were not satisfactory to the company, Taishin Financial said, adding that the government scrutinized Surfeit due to its status as a foreign company.
Surfeit holds a NT$13 million (US$406,364) stake in the Taiwanese banking-focused conglomerate, Taishin Financial said.
Surfeit said that the government’s interference has prevented the Singaporean company from gaining expected economic gains from investing in Taishin Financial, affected the business prospects of Taishin International Bank (台新銀行) and caused Taishin Financial to book a loss of NT$14.8 billion due to the loss of majority management rights in CHB, a person close to the matter was quoted as saying in a report in the Chinese-language Liberty Times (the sister newspaper of the Taipei Times).
Surfeit’s legal council is expected to arrive in Taiwan for a final round of negotiations with the government before the case is submitted for arbitration in The Hague, Netherlands, the report said.
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