Thu, Jun 15, 2017 - Page 11 News List

SinoPac denies dispute would delay subsidiary sell-off

By Ted Chen  /  Staff reporter

SinoPac Financial Holding Co chairman Ho Shou-chuan yesterday apologizes for the company’s involvement in corruption cases over the past few months at the company’s annual shareholders’ meeting in Taipei.

Photo: CNA

SinoPac Financial Holdings Co (永豐金控) yesterday dismissed rumors that its latest regulatory dispute has delayed plans to sell off its US-based banking subsidiary, potentially leading to NT$10 billion (US$330.8 million) in penalties for failing to meet contract obligations with a buyer.

The US Financial Supervisory Commission (FSC) on Tuesday blocked SinoPac Financial’s proposal to sell Far East National Bank, to NASDAQ-listed Cathay General Bancorp in a US$340 million deal, which the companies announced in July last year.

At an annual general meeting in Taipei, SinoPac Financial chairman Ho Shou-chuan (何壽川) lashed out at shareholders who questioned the decision, and said that the company is working with the commission to resubmit its application, in addition to continuing negotiations with the US buyer.

After reviewing the application for three quarters, the FSC halted the sale due to inadequate filings.

The commission said that SinoPac Financial had failed to provide detailed information on the sale price, as well as its motivation to offload its US-based subsidiary.

The commission also said that it is unable to verify whether the agreement between the two sides included stipulations on penalties in the event that the sale is not completed before the contract’s expiration on July 8.

The setback follows a string of violations at the conglomerate’s leasing, securities brokerage and banking subsidiaries in Taiwan and abroad.

Shareholders vented their dissatisfaction with the company’s lapses in governance, auditing and internal control measures.

Shareholders also questioned whether there was dereliction of duty by the company’s auditing departments, and whether its chairman and board members should be held responsible for the violations.

One shareholder even alleged that Ho had circumvented the company’s auditing process and instructed that certain loans be approved, leading to regulatory penalties.

Ho said that the company has set its sights on leading its domestic peers in governance and compliance by utilizing regulatory technology, known as “regtech,” solutions that digitize manual reporting and compliance processes to prevent future lapses.

The company saw its net income last year drop 23.72 percent year-on-year to NT$8.28 billion, with Ho attributing the outcome to inclement market conditions left by successive central bank interest rate cuts.

Meanwhile, a board of directors election held yesterday had little effect on the company’s board, as Ho and son Felix Ho (何奕達) took the first and second positions in ballots.

Sharesholders approved plans to distribute a dividend of NT$0.694 per share, consisting of a cash dividend of NT$0.3444 and a 3.5 percent stock dividend.

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