The Financial Supervisory Com-mission abruptly announced late last night that it would take over The Chinese Bank (中華銀行) after two subsidiaries under its parent company, Rebar Asia Pacific Group, claimed insolvency protection.
The decision was made after the takeover of troubled Enterprise Bank of Hualien (花蓮企銀) yesterday afternoon in an unprecedented case of the govenment taking over two lenders in a single day.
The commission was to delegate the Central Deposit Insurance Corp to take over the bank at midnight last night. The comission also immediately suspended all powers held by The Chinese Bank's board, supervisors and shareholders. Its board directors have been banned from leaving the country and their assets have been frozen.
The bank's net worth had reached negative NT$15.3 billion (US$469 million). Its shares will be traded in cash transaction only starting on Monday.
"Panicked depositors withdrew NT$13 billion as of yesterday, which consumed all the bank's cash," commission Chairman Shih Jun-ji (
Central Deposit Insurance will inject NT$30 billion into the bank on Monday to handle further withdrawals, he said, "and every penny of people's deposits is fully secure."
The debt-ridden bank's operations will continue as normal during the takeover period, he said.
It appeared that the financial regulator misjudged the whole situation, as
Shih assured the public yesterday afternoon that they are able to but would
not take over the Chinese Bank. "We did not expect things to become so worse
with this scale of bank runs beforehand," Shih said.
He said the commission will introspect the whole process afterwards and he
would bear the responsibility for consequences if there's any.
also see story:
Rebar admits notification delay
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