January 23, 2018 / 11:14 AM / a month ago

EFG shares drop after Taiwan court orders it to return $193.8 mln

ZURICH, Jan 23 (Reuters) - EFG International shares fell as much as 5.9 percent on Tuesday after a Taiwanese court ordered the Swiss private bank to return more than $193.8 million related to a disputed loan.

EFG International had loaned cash to an affiliate of a Taiwanese insurance company that went into receivership in 2014, it said in a statement. The insurer’s former chairman has since been convicted of misappropriating money, including loan proceeds, EFG said.

The insurer’s Taiwanese receiver had sued EFG, seeking to recover assets used as collateral for the loan. Now, a court has ruled the loan transaction was invalid and ordered EFG to return the money plus interest.

EFG, which previously said it had made provisions only for unpaid interest on the loan, disputed the Taiwanese court ruling and pledged to continue its legal fight.

“The bank fundamentally disagrees with the tribunal’s reasoning,” EFG said in a statement. “It will vigorously challenge in court the validity of the award and any attempt to enforce it.”

EFG is assessing the ruling’s impact on its annual financial report, due for release on Feb. 28, after earlier warning a defeat could prompt “a loss that would materially affect its results of operations and financial condition”.

EFG shares were down 3.4 percent at 1010 GMT. The stock has risen by more than three quarters over the past 12 months, boosting its market capitalisation to about 3.24 billion Swiss francs ($3.37 billion).

In addition to the Taiwan fight, EFG has been seeking to arrest an outflow of client funds after buying the troubled Swiss private bank BSI in 2016 following that bank’s legal problems that included transactions tied to scandal-hit Malaysian sovereign fund 1MDB.

$1 = 0.9623 Swiss francs Reporting by John Miller; Editing by Mark Potter

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