Taiwan regulator vows to aid Polaris after death of company chairman

Polaris Securities Co., whose chairman, Wayne Pai, was found dead Friday in an apparent suicide, will get assistance from Taiwan's Financial Supervisory Commission to help stabilize the nation's second-largest brokerage.
"Chairman Pai's death is a big loss to the financial industry," the commission said in a statement placed on its Web site late Friday. "We are willing to provide any necessary assistance, helping the group continue smooth operations, so as to reduce the impact on financial markets and protect the interests of investors."
Pai, 55, founded Polaris in 1988 and built Taiwan's biggest online brokerage by pioneering exchange-traded funds on the island. His body was found by fishermen Friday morning off Taiwan's west coast. The firm named Lin Shau-dai, 75, head of affiliate Polaris International Securities Investment Trust Co., as chairman.
"While Pai's death is a shock, the impact on the company and the market should be limited," said Andrew Chen, who manages the equivalent of US$2.4 billion as chief executive officer at HSBC Asset Management Taiwan Ltd. in Taipei. "Pai has long entrusted other executives to manage the Polaris group."
Polaris slumped 6.8 percent in Taipei trading Friday to an almost five-month low at NT$15.80. The stock has tumbled 31 percent since the start of May, when prosecutors raided Polaris offices and questioned Pai about claims Polaris overpaid when it bought shares in an asset-management unit from its executives.
Polaris in 2004 paid NT$899 million (US$30 million) to buy 28 percent of Polaris International from 22 individuals, 12 of whom are related to the firm's management or directors, including Pai.
"Pai was the only one singled out as a defendant in this case," Lin Chin-chun, a spokesman for the Taipei District Prosecutor's Officer, said by phone in Taipei Friday. A probe into whether other executives were involved in a breach of trust remains open, he said.
Pai contacted the company after landing on Penghu Island on July 2. "If I am gone, please try your best to stabilize the company and hold a board meeting to elect Lin as chairman," President Peter Huang cited Pai as telling him by telephone. A search was initiated immediately after that.
Polaris will soon issue exchange-traded funds in Hong Kong and Singapore and set up a branch and subsidiary in Singapore, the company said.
"The company has established good platforms, especially in Hong Kong, to be a regional player," said HSBC Asset's Chen, who declined to say whether his funds hold Polaris shares. "It's also good at derivatives products."