FSC approves Yuanta’s buy of Tong Yang Securities

The Financial Services Commission on Wednesday authorized Taiwan-based Yuanta Securities’ stock acquisition of Tong Yang Group’s troubled brokerage house.

Yuanta’s shares will represent about 53.6 percent of Tong Yang Security’s outstanding shares, replacing Tong Yang International and Tong Yang Leisure as the largest stakeholder.

“We’re hoping that the merger can help (Tong Yang Securities) introduce investment products that target both the domestic and overseas market,” an official from the South Korean brokerage told local media.

Yuanta was the sole bidder for the cash-strapped Tong Yang Securities, which was allegedly involved in sponsoring and issuing counterfeit bonds of its affiliates to retail investors to balance the group’s liquidity crunch.

Tong Yang Group put its brokerage arm on the block earlier this year after its five affiliates entered court receivership in October 2013.

Tong Yang Securities is also in ongoing court proceedings looking into whether the brokerage house’s involvement in selling debt issued by subsidiaries that went bankrupt was illegal.

By Suk Gee-hyun (monicasuk@heraldcorp.com)