Taipei City Government officials said yesterday they are considering suing former TaipeiBank (台北銀行) president Liao Cheng-ching (廖正井) for alleging the city government goofed in merging the bank with Fubon Financial Holding Co (富邦金控).
Taipei City Bureau of Finance Director Lee Sush-der (
Liao said it was a mistake to merge TaipeiBank with Fubon Commercial Bank, one of the subsidiaries of Fubon Financial Holding Co, adding Taipei Bank is bigger than Fubon in terms of assets.
Liao is now Taoyuan County deputy commissioner.
Lee said that net value, rather than total assets, is the relevant measure.
Before the merger, Lee said, TaipeiBank's total assets were NT$658.7 billion, while its total liabilities were NT$612.9 billion. Its net value was NT$45.8 billion.
Fubon Financial Holding Co had total assets of NT$462.7 billion and its total liabilities were NT$361.2 billion. Its net value was NT$101.5 billion.
After the merger in last December, Fubon's net value increased to NT$138.8 billion.
"According to the numbers, we can see clearly that Fubon's performance is better than TaipeiBank's. What Liao said makes no sense," Lee said.
However, the total assets of Fubon to which Liao referred were the total assets of Fubon Commercial Bank, not that of Fubon Financial Holding Co, according to a statement by Liao in a Chinese-language newspaper.
The net value of Fubon Commercial Bank is NT$27.6 billion, he said.
"There is still a disparity between the two banks in net value," Liao said.
Lee said the merger process was open and met international standards, adding it did not involve anything illegal.
He said the Taipei District Prosecutors' Office and the Control Yuan have investigated the merger.
"So far they have not found anything involving insider trades or unusual trades," Lee said.
Chen Ching-hsiu (
"If Liao does not apologize for his statement or correct it, we do not rule out suing him," Chen said.
Lee said that since the Financial Holding Company Law (
"TaipeiBank was a medium-sized financial company, thus we had to consider TaipeiBank's future. We could not let TaipeiBank become a subsidiary without any action," Lee said.
The city government decided that TaipeiBank should merge with a larger financial holding company and hired the financial services company Goldman Sachs as a consultant to find five companies suitable for a merger.
Goldman Sachs was also selected from four investment management companies, Lee added.
Former TaipeiBank CEO Jesse Ding (丁予康), also the current trustee of Fubon Financial Holding Co, said that Fubon outbid competitors by offering the best price, NT$36 per share, and the best conditions for TaipeiBank's employees.
"The process of the merger from the very beginning was recorded clearly and is open to examination," Ding said.
He said TaipeiBank's profits were not as high as city councillors said.
"What TaipeiBank contributed to the city's treasury last year was only about NT$500 million, not the NT$6 billion that city counselors claimed," he said.
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