Sat, Jun 17, 2017 - Page 12 News List

SinoPac Financial probed over questionable loans

By Ted Chen  /  Staff reporter

SinoPac Financial Holding Co’s headquarters is pictured yesterday in Taipei.

Photo: CNA

Prosecutors yesterday launched an investigation into SinoPac Financial Holdings Co (永豐金控) for suspected violations of the Securities Exchange Act (證券交易法) relating to a number of questionable loans extended by the company.

The probe came after the Financial Supervisory Commission fined SinoPac Financial NT$10 million (US$329,153) in April, when the regulator found that the company’s leasing unit had extended NT$5 billion in questionable loans to Sun Power Development and Construction Co (三寶建設) — whose chairman is related to SinoPac Financial chairman Ho Shou-chuan’s (何壽川) wife — and handed over its findings to prosecutors.

Prosecutors and investigators searched SinoPac Financial’s head office in Taipei as well as offices of the company’s subsidiaries, while Ho was summoned by prosecutors for questioning as a suspect, along with 23 witnesses, the Ministry of Justice’s Investigation Bureau said.

The loans extended to Sun Power were transferred between shell companies controlled by SinoPac and Sun Power without sufficient collateral, which violated the limitations on transactions between interested parties, as it was discovered that the borrower had familial ties to Ho, the commission said.

During a shareholders’ meeting on Wednesday, Ho vented his frustration at stringent filing requirements on declaring kinship of all third-degree relatives, which has led to a number of lapses.

He pledged to improve the company’s governance.

SinoPac Financial yesterday said that it is cooperating with investigators and that its operations would not be affected.

The company is embroiled in other infractions by its securities brokerage and banking units.

The commission has said it would impose another round of penalties against the company before the end of this month.

Shares in SinoPac Financial yesterday fell 0.44 percent to NT$9.15 in Taipei trading, before the search was carried out.

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