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SinoPac Financial sues former executive, Morgan Stanley over US unit sale

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SinoPac Financial sues former executive, Morgan Stanley over US unit sale

SinoPac Financial Holdings Co. Ltd. and its banking unit Bank SinoPac Co. Ltd. filed lawsuits against Michael Chang, former president of the bank, and Morgan Stanley in connection with the sale of the bank's U.S. unit to Cathay General Bancorp.

The Taiwanese companies filed a criminal suit against Chang, accusing him of breach of trust over the sale of the U.S. unit. Chang deliberately concealed the actual value of Far East National Bank, which resulted in the underestimation of the asset, SinoPac said in a Sept. 23 filing.

Separately, SinoPac filed a civil suit against Morgan Stanley over the sale and sought compensation of US$69.28 million. The group alleged that Morgan Stanley did not fulfill its advisory duties and exercise due care when it acted as its financial adviser for the sale of Far East National Bank.

SinoPac added that the situation seriously damaged the interest of its banking unit.

As part of the deal, Los Angeles-based Cathay General Bancorp in July 2016 agreed to acquire SinoPac Bancorp from Bank SinoPac for US$340 million. The acquisition was completed in July 2017.