Taishin Financial Holding Co Ltd (台新金控) yesterday asked the Ministry of Finance to let it take over state-run Chang Hwa Bank (CHB, 彰化銀行), and end their legal dispute over the management of the bank, Taishin chairman Thomas Wu (吳東亮) told a shareholders’ conference in Taipei.
Wu made the remark after CHB shareholders said they were concerned about the position Taishin would take on CHB’s board during its shareholders’ meeting next week.
The conglomerate has been contesting the ministry’s right to manage CHB since 2014, when it lost a majority on the CHB board to the ministry, as the ministry had in 2005 agreed that Taishin should keep the rights.
Photo: Kelson Wang, Taipei Times
“Although the Supreme Court has not yet made a judgement, the Taipei District Court’s ruling in 2016 established the validity of a contract between us and the ministry signed in 2005,” Wu said.
The district court’s verdict laid the foundation for the company’s continued efforts to regain control of the state-run lender, Wu said.
However, Wu said that he had no intention to make an enemy of the government, and Taishin is willing to settle the issue through negotiations on the premise that all shareholders’ right should be guaranteed, if the government aims to gain full control of CHB.
Meanwhile, Taishin Financial president Welch Lin (林維俊) yesterday said that a CHB statement in English that the ministry did a better job running the bank from 2014 to last year than Taishin did from 2005 to 2013 in terms of return on assets and return on equity (ROE) was not true.
“The claim is wrong, as it purposely ignored that we had to write off bad loans to reduce CHB’s nonperforming loan ratio after taking over, because the bank’s financial strength deteriorated when the ministry managed it before 2005.” Lin said.
“For example, we wrote off NT$59.6 billion [US$2 billion] in 2005, a high amount for a single year,” Lin said.
Lin said that CHB’s statement deceived foreign investors, misleading them into believing that the ministry would be a better owner, so it could gain their support.
Taishin did a good job running CHB, given that its average ROE was 11.6 percent from 2006 to 2014, higher than all banks’ average of 6.6 percent during the same period, Lin said.
By comparison, CHB’s average ROE fell to 9.96 percent from 2015 to last year, when the ministry owned the bank, while all Taiwan banks saw their average ROE recover to 9.5 percent, he added.
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