Banking giants UFJ Holdings and Mitsubishi Tokyo Financial Group can hold merger talks to form what would be the world's biggest bank, a Japanese high court ruled yesterday.
But rival Sumitomo Trust, which had sought to halt the talks, said it would appeal the decision to the Supreme Court.
Tokyo High Court spokeswoman Chieko Kamiyama said the court scrapped an earlier lower court decision and agreed to allow merger talks to go forward.
With combined assets of about ?188 trillion (US$1.7 trillion), UFJ and Mitsubishi Tokyo banking operations -- said it would ask the Supreme Court to rule on the case. An appeal would be filed as early as today, Sumitomo Trust spokesman Kazutaka Ogata said.
While the appeal puts off a final decision for now, yesterday's decision still comes as a setback for Sumitomo Trust.
Sumitomo Trust had won an injunction from the Tokyo District Court to stop the UFJ-Mitsubishi Tokyo merger talks on July 27.
UFJ had immediately appealed, saying the agreement with Sumitomo Trust was not legally binding.
The wrangling over the proposed merger is unusual for Japan, where such major link-ups are still relatively new.
But the stakes are high, because the merger between Mitsubishi Tokyo and UFJ would change the landscape of Japan's banking sector with the new group at the top, Mizuho Financial at No. 2 and Sumitomo Mitsui a distant third.
UFJ and Mitsubishi Tokyo had planned to announce a basic agreement toward a merger by the end of last month but had to postpone it because of the lower court decision. But both sides stressed they were still interested in the merger.
Mitsubishi Tokyo spokesman Seiji Itai said there was no change in its stance of wanting a merger with UFJ, including its trust banking unit.
"We welcome the court deci-sion," he said.
Sumitomo Mitsui Financial Group, which includes Sumitomo Trust, announced its own bid Monday for a merger with UFJ, saying it would offer a more egalitarian deal than Mitsubishi Tokyo and give UFJ at least ?500 billion in financial aid.
Sumitomo Mitsui said yesterday its merger offer was still on.
"We think the merger between our group and the UFJ group is the best choice for the groups' investors, customers and workers," it said in a statement, adding that it will continue to woo UFJ with proposals.
In issuing its decision, the court said that if UFJ wants to press on with merger talks with Mitsubishi Tokyo it must first come up with ?7.5 billion as a security payment for possible damages for Sumitomo Trust.
UFJ, Mitsubishi Tokyo and Sumitomo Mitsui are three of the country's top "Big Four" banking groups. Although the other three had posted profits for the latest fiscal year, UFJ recorded a deep loss totaling nearly ?403 billion.
Analysts and the Tokyo stock market have generally welcomed the possible merger as a stabilizing force for Japan's overall financial system. But fears remain about the health of UFJ's books, which are saddled with loans to troubled borrowers such as giant retailer Daiei. It has also been reprimanded by the Financial Services Agency for being evasive during regulatory inspections.
Analysts have warned that the sheer size of such a merger is likely to be filled with problems, from clashes of corporate cultures to the simple task of linking computer systems.
BACK IN THE NEIGHBORHOOD: The planned transit by the ‘Baden-Wuerttemberg’ and the ‘Frankfurt am Main’ would be the German Navy’s first passage since 2002 Two German warships are set to pass through the Taiwan Strait in the middle of this month, becoming the first German naval vessels to do so in 22 years, Der Spiegel reported on Saturday. Reuters last month reported that the warships, the frigate Baden-Wuerttemberg and the replenishment ship Frankfurt am Main, were awaiting orders from Berlin to sail the Strait, prompting a rebuke to Germany from Beijing. Der Spiegel cited unspecified sources as saying Beijing would not be formally notified of the German ships’ passage to emphasize that Berlin views the trip as normal. The German Federal Ministry of Defense declined to comment. While
‘REGRETTABLE’: TPP lawmaker Vivian Huang said that ‘we will continue to support Chairman Ko and defend his innocence’ as he was transferred to a detention facility The Taipei District Court yesterday ruled that Taiwan People’s Party (TPP) Chairman Ko Wen-je (柯文哲) be detained and held incommunicado over alleged corruption dating to his time as mayor of Taipei. The ruling reversed a decision by the court on Monday morning that Ko be released without bail. After prosecutors on Wednesday appealed the Monday decision, the High Court said that Ko had potentially been “actively involved” in the alleged corruption and ordered the district court to hold a second detention hearing. Ko did not speak to reporters upon his arrival at the district court at about 9:10am yesterday to attend a procedural
‘UPHOLDING PEACE’: Taiwan’s foreign minister thanked the US Congress for using a ‘creative and effective way’ to deter Chinese military aggression toward the nation The US House of Representatives on Monday passed the Taiwan Conflict Deterrence Act, aimed at deterring Chinese aggression toward Taiwan by threatening to publish information about Chinese Communist Party (CCP) officials’ “illicit” financial assets if Beijing were to attack. The act would also “restrict financial services for certain immediate family of such officials,” the text of the legislation says. The bill was introduced in January last year by US representatives French Hill and Brad Sherman. After remarks from several members, it passed unanimously. “If China chooses to attack the free people of Taiwan, [the bill] requires the Treasury secretary to publish the illicit
The Executive Yuan yesterday warned against traveling to or doing business in China after reports that Beijing is recruiting Taiwanese to help conceal the use of forced Uighur labor. The government is aware that Taiwan-based influencers and businesses are being asked to make pro-Beijing content and offered incentives to invest in the region, Executive Yuan acting spokeswoman Julia Hsieh (謝子涵) told a news conference. Taiwanese are urged to be aware of the potential personal and reputational harm by visiting or operating businesses in China, Hsieh said, adding that agencies are fully apprised of the situation. A national security official said that former Mainland
RSS