Sat, Dec 02, 2017 - Page 12 News List

SinoPac seeks whistle-blower resolution

DAMAGED REPUTATION:SinoPac Financial Holdings said it would consider dropping legal action against former SinoPac Securities Ltd chief financial officer Melody Wang

By Ted Chen  /  Staff reporter

SinoPac Financial Holdings Co (永豐金控) yesterday said that it would resolve a dispute with a former executive, as regulators bolster whistle-blower protection rules.

The company has not ruled out resolving the dispute with former SinoPac Securities Ltd (永豐金證券) chief financial officer Melody Wang (王幗英), SinoPac Financial president Chen Chia-hsien (陳嘉賢) told reporters at an earnings conference in Taipei.

The company would consider dropping legal action against Wang and efforts to seek reparation if she would agree to certain conditions, Chen said, declining to comment further on the ongoing court case.

Wang — who is believed to be the key whistle-blower against the company — earlier this year revealed wrongdoings at Hong Kong-based SinoPac Securities (Asia) Ltd (永豐金證券亞洲), which had provided extensive margin credit for stock positions in troubled China Huishan Dairy Holdings Co (中國輝山乳業).

In addition, Hong Kong regulators in May ordered a trading halt in China Huishan Dairy shares, leading to losses of NT$1 billion (US$33.3 million) for the brokerage and adding pressure to its parent’s bottom line.

However, the company has maintained that Wang had spread false information that damaged its reputation and that her termination was unrelated to her reported role as a whistle-blower.

The company has held two internal review meetings, but Wang only attended the first session, Chen said.

Apart from Wang, the company must also consider the interests of its 8,700 employees in its decision about the matter, Chen added.

At the earnings conference, SinoPac Financial said net income in the first three quarters of this year slipped 2.1 percent annually to NT$68.41 billion, while earnings per share were NT$0.62.

During the same period, the company also incurred a NT$600 million charge on its books to fund a performance bond required for the sale of its US-based banking subsidiary.

Without these charges, company earnings would have posted growth, Chen said.

Meanwhile, the company’s exposure to Sun Power Development and Construction Co (三寶建設) through a series of questionable loans has dropped from US$134 million at the end of last quarter to about US$28 million, Chen said, adding that the borrower has been servicing its debt, and the full amount is to be repaid before the end of this year.

Chen also reiterated his promise to improve the company’s corporate governance and continue efforts to improve internal controls and auditing.

Separately, Financial Supervisory Commission Chairman Wellington Koo (顧立雄) said that the commission would finish drafting amendments to rules on whistle-blower protection in the next two weeks.

The commission is also reviewing the findings of a probe into Wang’s termination by SinoPac Financial and should be making a ruling in the next two weeks, he added.

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