Tongyang is now called YuantaTongyang Securities will ditch its 30-year brand starting in October and reboot with the new name Yuanta Securities Korea in order to put behind the company’s scandal over improper issuing of corporate bonds and commercial paper last year.
The company’s shareholders yesterday voted for a new start for the troubled securities firm in an interim meeting held at the Seoul YWCA building in Myeong-dong, central Seoul.
Taiwan’s Yuanta Securities acquired Tongyang in July after the deal was approved by the Financial Services Commission. Taiwanese financial mogul Hwang Wei Cherng has been appointed co-chief executive officer of the new Yuanta Securities Korea along with its current CEO Suh Myung-suk.
Yuanta Securities, founded in 1996, is the largest Taipei-based financial group with 3.1 trillion won ($3.01 million) in capital and 7.5 trillion won in assets.
“Many employees at Tongyang have high expectations for a new start for the group with a new brand,” said the securities unit’s spokesman. “It will help the group restore an image that was shredded by the incidents of last year.”
Yuanta Securities purchased a 53.61 percent stake in the securities firm, which used to be held by Tongyang International and Leisure, becoming the largest shareholder.
Tongyang Securities, founded in 1962, has been using the name since 1985, and was established as a topdrawer local securities company.
Last year, the securities unit and Tongyang Group were embroiled in an infamous scandal after they sold high-risk bonds to individual investors just before the financial collapse of five affiliates that filed for court receivership.
Chairman Hyun Jae-hyun ordered Tongyang Securities employees to recommend customers buy the investments, especially in Tongyang Cement, in which the debt-to-equity ratio was relatively lower than other group affiliates.
From July to September 2013, the troubled group issued a total of 157 billion won ($146.4 million) worth of asset-based commercial paper to investors through Tongyang Securities, using shares of Tongyang Cement & Energy as collateral.
Tongyang Inc., Tongyang Leisure, Tongyang International, Tongyang Cement and Energy and Tongyang Networks filed for the bankruptcy protection on Sept. 30 and Oct. 1 after they failed to pay back maturing short-term debts worth some 110 billion won. The Seoul Central District Court accepted applications for court receiverships for five affiliates of the country’s 38th-largest conglomerate.
The group’s malpractices cost customers about 2.3 trillion won in total.
By song su-hyun [firstname.lastname@example.org]