Taishin Financial Holding Co (台新金控) yesterday said it has no intention of buying back its own shares, and would focus instead on resolving a lingering dispute over the management rights of Chang Hwa Commercial Bank (CHB, 彰化銀行) and whether to redeem NT$14 billion (US$425.8 million) worth of special shares.
The bank-focused conglomerate announced its goals at an investors’ conference, firmly rejecting the overtures of the Ministry of Finance, which has urged companies to buy back their own shares to help stabilize the local bourse.
“Taishin Financial shares have tumbled 27 percent since Dec. 8, when the ministry seized control of CHB from us,” Taishin Financial Holding chief financial officer Welch Lin (林維俊) said.
The fall is much deeper than the 11 percent retreat for the financial sector during the same period, although Taishin Financial had delivered a 15.47 percent return on its equities as of June, with net worth standing at NT$12, Lin said.
The dispute over CHB management rights has weighed on Taishin Financial shares and the company would keep on seeking justice until the matter is remedied, Lin said.
The ministry won a majority of board seats in CHB through state-run financial institutions, raising controversy over the binding power of a 2005 agreement where the ministry pledged to yield boardroom control to Taishin Financial, Lin said.
In addition, Taishin Financial in October intends to decide how to address the special shares the company issued in March 2006 and that can be redeemed from March next year, Lin said.
Shareholders will take a haircut when redeeming the shares due to the drastic corrections in Taishin share prices, Lin said, adding that the company would discuss the issue with the Financial Supervisory Commission.
Taishin Financial is expectng business growth to remains flat for the rest of this year, after the firm recorded NT$8.4 billion in net profit for the first half, Lin said.
The results represented a 7.1 percent decline from the same period last year and translated into earnings of NT$0.9 per share, company data showed.
The company would be more cautious going forward in light of the growing volatility in global financial markets, Taishin Financial president Joseph Jao (饒世湛) said.
The conglomerate lowered exposure by more than 20 percent in Treasury Market Unit operations that recorded a drop of NT$1 billion in income contribution, Jao said.
Taishin Financial shares closed up 5.37 percent at NT$10.8 yesterday, stronger than the TAIEX’s 3.58 percent increase, Taiwan Stock Exchange data showed.
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