SinoPac Financial Holdings Co (永豐金控) and its banking unit, Bank SinoPac (永豐銀行), yesterday filed a lawsuit at the Taipei District Court against Michael Chang (張晉源), accusing the bank’s former president of breach of trust over the sale of its US unit to Cathay General Bancorp in 2016.
Chang is alleged to have sold the bank’s US subsidiary, Far East National Bank (FENB), at lower than market value, SinoPac said.
“Chang deliberately concealed part of FENB’s assets, valued at US$69.28 million, to SinoPac’s board of directors, which finally agreed to sell FENB to Cathay General Bancorp for US$353 million,” SinoPac said in a company filing. “After nearly three years of clarifications and investigations, the bank found that Chang deliberately concealed the actual value of FENB.”
SinoPac said that Chang is accused of a breach of trust and contravening the Financial Holding Company Act (金融控股公司法) and the Banking Act (銀行法).
“The company should pursue litigation in accordance with the law against those who damage the company, and investors’ rights and interests,” SinoPac said.
Because Chang was a whistle-blower in a case that saw former SinoPac Financial chairman Ho Shou-chuan (何壽川) removed from his post in 2017 for facilitating dubious transactions and loans between business units, the lawsuit has raised eyebrows.
SinoPac also filed a civil lawsuit against Morgan Stanley over the sale of FENB, alleging that the US firm, which served as a financial consultant for the 2015 sale, did not fulfill its duties and exercise the due care when conducting its business.
The transaction damaged the interests of the bank, SinoPac said, adding that it is also claiming compensation of US$69.28 million.
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