The Financial Supervisory Commission (FSC) has launched an insider trading probe, after Jih Sun Financial Holding Co’s (日盛金控) shares spiked on the Taipei Exchange before Fubon Financial Holding Co (富邦金控) announced its bid to acquire the firm, FSC Chairman Thomas Huang (黃天牧) said yesterday.
On Monday last week, 13.329 million Jih Sun shares were traded on the Taipei Exchange, 6.27 times more than the average daily trading volume of 2.125 million shares from Dec. 1 to Dec. 11, the exchange’s data showed.
That was four days before Fubon Financial announced that it planned to acquire at least 50 percent of Jih Sun’s shares at NT$13 per share.
Photo: CNA
Asked by Democratic Progressive Party (DPP) Legislator Michelle Lin (林楚茵) at a meeting of the legislature’s Finance Committee in Taipei if there was insider trading, Huang said that the commission has assigned the Taipei Exchange the task of examining the matter.
“All transactions leave traces. We have looked into the shares traded, not only for December, but also … earlier,” Huang said.
The commission had since October kept confidential the information that Fubon Financial had reported its intention to acquire Jih Sun, Huang said.
If people familiar with Fubon’s acquisition were engaged in the alleged insider trading, the commission’s probe would get to the bottom of it, he added.
Lin said it was strange that Fubon Financial said that if it could not purchase 50 percent of Jih Sun’s shares via a public tender offer, it would not buy any shares, and Jih Sun president Wang Chih-fang (王芝芳) reportedly told employees that the acquisition was unlikely to succeed.
“Is it possible that the whole plan was ... intended to boost Jih Sun’s share prices? Jih Sun’s share prices rose by the 10 percent daily limit in Taipei trading on Monday and Tuesday,” Lin said.
The exchange would monitor Jih Sun’s share price movements, Huang said.
Whether the acquisition would succeed would depend on if Jih Sun’s shareholders want to sell their stocks, while the FSC’s rule that financial firms must acquire another financial firm via public tender offer would mean that every retail shareholder would have the chance to be involved, Huang said.
Meanwhile, Huang yesterday rejected DPP Legislator Kao Chia-yu’s (高嘉瑜) comment that the FSC approved Fubon’s acquisition quickly in a bid to help Chinese tycoon Xiao Jianhua (肖建華), head of the Chinese conglomerate Tomorrow Holding Ltd (明天控股), dispose of his assets.
Hong Kong-based Capital Target Ltd (CTL, 建群投資), which owns a 24.09 percent stake in Jih Sun, is reportedly owned by Xiao.
The FSC approved Fubon’s acquisition plan as the firm meets all the regulatory requirements, and the commission could not assume that CTL has Chinese investors without evidence, Huang said, adding that the commission is still investigating CTL’s share register.
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