Taishin Financial Holding Co (台新金控) once again yesterday urged the Ministry of Finance (MOF) to compensate it for a loss incurred when it invested in state-run Chang Hwa Commercial Bank (CHB, 彰化銀行), after the ministry rejected its request last week.
Taishin Financial on Friday asked the ministry to partially make up a NT$19.1 billion (US$680.4 million) loss from its investment in CHB, quoting Premier Su Tseng-chang (蘇貞昌) as saying that the “government would not let Taishin exit [CHB] with losses.”
However, the ministry rejected its request, saying that Taishin had earned a NT$266.2 billion return on its investment.
Photo: Chen Mei-ying, Taipei Times
While Taishin said that it lost NT$19.1 billion after CHB’s share price fell from the NT$26 per share that it paid when it bought 1.4 billion preferred shares in 2005, the ministry said that Taishin did not have a loss after factoring in the NT$10.9 billion it earned in cash dividends and the NT$15.6 billion in stock dividends.
“On June 10, Taishin sold 200 million shares of CHB at NT$15.58 per share, lower than the share’s closing price of NT$16.7 that day. It was Taishin that decided to sell its CHB shares at a lower price,” the ministry said in a statement yesterday. “So it is irrational for it to ask for government compensation.”
In a statement yesterday, Taishin said that it regretted to hear the ministry’s decision, adding that its calculations conformed to common business practice.
The ministry ignored costs that Taishin incurred when it issued debentures and preferred stocks to fund its purchase of CHB shares, the financial conglomerate said, adding that the ministry had never acknowledged its efforts to invest in the state-run bank, which it had done in response to government policy at the time.
Taishin said that a third party should step in to clarify the dispute between the company and the ministry, and to find a solution.
“We hope that the ministry will honor the premier’s instructions and treat us in a friendly manner so that we can find a win-win solution,” Taishin said.
However, the ministry said that according to accounting rules, the costs that Taishin mentioned should be viewed as expenses.
Taishin’s share price yesterday edged up 0.29 percent to NT$17.2 in Taipei trading, while CHB’s share price dipped 0.6 percent to NT$16.6, Taiwan Stock Exchange data showed.
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