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SinoPac Financial Holdings (2890.TW)

PJ Asset Management Urged that the Board of Directors of SinoPac FHC (2890 TT) Seek Compensation from the Relevant Responsible Personnel who were Charged by the FSC or Prosecutors

July 12 2019

PJ Asset Management Urged that the Board of Directors of SinoPac FHC (2890 TT) Seek Compensation from the Relevant Responsible Personnel who were Charged by the FSC or Prosecutors

TAIPEI, Taiwan, July 10, 2019 /PRNewswire/ -- PJAM recently sent a letter to urged that the Board of Directors of Sinopac Financial Holdings ("SinoPac FHC" or "Company") should immediately seek compensation from the relevant responsible persons who were previously charged by the FSC or prosecutors due to the events happened between 2016 and 2017.

PJAM's points are as follows:

1.  PJAM and its related parties hold more than 6% of the total voting shares of SinoPac FHC.

2.  SinoPac FHC was fined at huge amounts by the FSC for many cases happening in the years of 2016 and 2017. Some of the cases involved high-level management team and board director, whom had not only been prosecuted, but also seriously damaged SinoPac FHC's image and all shareholders' benefits.  PJAM raised relevant questions in the Company's 2018 annual shareholders' meeting and investor relationship meeting, and demanded the board of directors then to take immediate actions and make a claim for the relevant losses. As the public attentions died away, we haven't seen any concrete action taken by the Company in the past years to seek the loss compensation. Even though the other shareholder raised the same question in 2019 annual shareholders' meeting, Mr. Chu, CEO of Sinopac FHC, dodged the issue and chose not to respond it specifically.

3.  Although PJAM felt pleased that SinoPac FHC's first half year's performance in 2019 has recovered to its right track, the Company's Integrity Management Committee which was set up due to the series of events of internal control negligence and management team's wrongdoings, has never explained to shareholders or investors what has been implemented and strengthened within the organization to avoid the repetition of misconducts, not to mention that its independent directors in the financial holding company refused to have a face-to-face meeting with PJAM upon our Mar meeting invitation.  By claiming itself above corporate governance standard, Sinopac FHC doesn't give PJAM the comfort that the Company's corporate governance transparency has improved since 2016.

4.  The fines penalized by the competent authority for the previous directors' misconducts were huge, which included NT$ 10 million of Ting Sing Group's case in 2016 and NT$10 million of J&R Trading's case in 2017, and the incurred loan loss was over NT$ 400 million. In accordance with the Article 64 of the Financial Holding Company Act, FHC should make a claim from the responsible persons after the fine is paid. However, to our knowledge, SinoPac FHC so far has not taken concrete legal actions related to this issue. The people involved were high level management team and related parties to the major shareholder's family, PJAM has reasonable doubt that the Company appeared to take biased and inattentive approach in an attempt to protect the people involved and allow time to dilute public attention.   

5.  PJAM strongly suggests the board members of SinoPac FHC respond to the above-mentioned concerns explicitly and immediately to convince all shareholders that Sinopac FHC did rise from the gloomy past and stand on firm ground to create a better value for all shareholders.

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