Yuanta Core Pacific Securities Co (元大京華證券), the nation's largest brokerage firm, yesterday secured a majority of board seats at Fuhwa Financial Holding Co (復華金控) as expected, in a step toward completing a drawn-out merger deal in the first quarter of next year.
During a provisional shareholders' meeting yesterday, Yuanta Core Pacific, Fuhwa Financial's largest shareholder, which controls a 45 percent stake along with its supporters, grabbed six out of nine board seats and two of three supervisor spots in the nation's eleventh-biggest financial group by assets.
Another major shareholder, Central Investment Holding Co (
A board meeting will be convened next Tuesday to select a chairman, according to Yuanta Core Pacific.
Central Investment, which opposes Yuanta Core Pacific's take-over attempt, said it will file a lawsuit to invalidate the selection result for board members and supervisors.
The tussle has delayed the proposed merger deal by one year, with Central Investment gunning against Yuanta Core Pacific's offer.
Yuanta Core Pacific has proposed swapping one of its shares for 1.5 to 1.7 Fuhwa Financial shares.
Central Investment wants Yuanta Core Pacific to propose a more "reasonable" share swap ratio, the company's president Steve Wong (汪海清) said on the sidelines of the meeting. However, he was tight-lipped about what ratio Central Investment would deem acceptable.
Fuhwa Financial's board is expected to review and discuss the merger deal later this year and decide on the share swap ratio, Fuhwa Securities Co (
The merger is expected to take effect in the first quarter of next year, while the actual integration of the firms could be completed by the middle of next year, he added.
"The projected merger will allow us to get an independent cash flow channel through Fuhwa Bank (復華銀行)," Yuanta Core Pacific Spokesman Lawrence Lee (李雅彬) said.
Under the current regulations, securities houses like Yuanta Core Pacific face tighter government rules regarding capitalization and investment than those commercial banks must follow, he said.
According to Yuanta Core Pacific's merger plan, the brokerage will first merge with Fuhwa Securities. The new brokerage entity will then cut its capital by at least NT$10 billion (US$304 million) and will return those proceeds to the parent, Fuhwa Financial.
Lee said that Fuhwa Financial may use the funds to strengthen Fuhwa Bank's capitalization and asset quality.
The proposed merger will have a positive impact on Fuhwa Bank's ratings, provided that Yuanta Core Pacific, which boasts strong capitalization, secures majority control of its parent group, Fitch Ratings said on Monday in a press release.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
HEAVY INVESTMENT: Moody’s affirmed the firm’s ‘Aa3’ rating with a ‘stable’ outlook due to its leading position in the industry and ability to match customer requirements Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue this year is expected to increase about 21 percent to NT$1.29 trillion (US$44.01 billion) from NT$1.07 trillion last year, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices, a Moody’s Investors Service report on Wednesday said. TSMC’s rate of revenue growth next year is to increase to 7.5 percent, the ratings agency said. The company, which supplies 5-nanometer chips for Apple Inc’s new iPad series, has introduced the advanced chips ahead of its competitors and gained a significant share of the market for the foundry industry’s
Sony Corp has cut its estimated Play Station 5 (PS5) production for this fiscal year by 4 million units, down to about 11 million, following production issues with its custom-designed system-on-chip (SOC) for the new console, people familiar with the matter said. The Tokyo-based electronics giant in July boosted orders with suppliers in anticipation of heightened demand for gaming in the holiday season and beyond, as people spend more time at home due to the COVID-19 pandemic. However, the company has come up against manufacturing issues, such as production yields as low as 50 percent for its SOC, which have cut into
O2O BICYCLE SHOW: The Taiwan Bicycle Show next year is to be online to offline, with forums, audio-visual conferences and livestreaming of the offline events Local bicycle makers expect demand to continue outpacing supply due to orders triggered by the COVID-19 pandemic, with some companies seeing orders back up through next year. “Next year is all full in terms of orders. Our lead time on components is one year,” Giant Manufacturing Co Ltd (巨大機械) chairwoman Bonnie Tu (杜綉珍) told a news conference in Taipei organized by the Taiwan External Trade Development Council (TAITRA) to announce next year’s Taipei Cycle Show. The pandemic has reduced bicycle supplies and increased demand around the world, Robert Wu (吳盈進), chairman of KMC (Kuei Meng) International Inc (桂盟國際), one of the world’s