Both FSC and China United confirmed the take-over.

The financial institution had been talking about finding a new management team. The effort however did not save it from being taken over by the FSC.

FSC chairman Hu Sheng-cheng made the announcement at 3:30 p.m. yesterday, saying the FSC has taken over China United and will ask the Bank of Taiwan to manage the bank for the time being.

China United in the beginning of the year announced it would return NT$700.28 million in advance payment from interested investors in its capital expansion effort. FSC’s take-over of the bank indicates its capital increase plan has failed.

At the same time, China United’s shares will not be traded on the Taiwan Stock Exchange (TSE) for ten days, after which the shares will be traded on a block-settlement basis, the TSE confirmed yesterday.

If the situation at the bank still shows no improvement, TSE may consider de-listing the company, it said.

China United became the fourth Taiwan financial institution to be taken over by the FSC, after the Taitung Business Bank, Enterprise Bank of Hualien, and the Chinese Bank. All four were listed as problematic banks by the Resolution Trust Corp., a government-run fund seeking to restructure such banks.

The Chinese Bank was taken over after two of its affiliate firms under the Rebar Group, China Rebar and Chia Hsin Food and Synthetic Fiber, filed for bankruptcy protection at the end of last year. A run on the bank subsequently took place, forcing the Central Deposit Insurance Corp. to bail it out with millions of dollars in cash.

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