(February 23, 2005, Taipei) In response to Yuen Foong Yu Paper Enterprise's announcement last Monday regarding its merger with SinoPac Holdings, Richard M. Hong, Chairman of SinoPac Holdings stated yesterday that much of the market speculation were inaccurate. According to Hong, in compliance with confidentiality agreements and legal regulations, SinoPac Holdings was not allowed to respond to such rumors prior to the board meeting. Now that the board meeting is convened, it is time to clarify the facts, and he also wishes to discuss the future of SinoPac to the shareholders and the public.

Mr. Hong believes that both the merger deals with International Bank of Taipei and Taishin Financial Holding Co. are good proposals. However, it's impossible to make a final decision within such a short period of time, given the complexity of the problems involved in a merger. Both deals remain open, and the board of directors of SinoPac Holdings will continue to evaluate and identify the best solution for the shareholders and employees.

Richard Hong also revealed that SinoPac did not initiate either both cases, and was approached by the two parties instead. Hong participated in a trip to Angkor Wat in Cambodia held by the Young Presidents' Organization in early February 2004. During the trip, Chairman Wu of Taishin Financial expressed interest in SinoPac Holdings, but later on Taishin's effort came to a halt. However, merger discussions were later resumed towards the end of last year. As for the Yuen Foong Yu Paper Enterprise, based on an interview by Business Weekly Magazine with Chairman Ho and his son, Ho started to explore the possibility of a merger in mid-2004 without notifying SinoPac Holdings' major shareholders.

Richard Hong says when the Financial Supervisory Commission of the Executive Yuan was established in July 1, 2004, Chairperson Kong Jaw-Sheng announced the beginning of the second financial reform. At the end of last year, President Chen Shui-Bien announced that financial holding companies should expand to become regional players with global competency.

Among 14 financial holding companies in Taiwan, SinoPac Holdings stands out in terms of securities, banking, plus international business. Therefore, SinoPac's next step should be to seek opportunity for further expansion, merge with others, or be acquired. SinoPac can consolidate or work with other financial service providers to drive merger that creates the most value for the country, society and shareholders.

Unlike other family-owned companies, SinoPac Holdings is a financial holding company with the least family involvement, says Hong. Hong hopes all prospective business partners will put aside their personal interests, express mutual respect, negotiate a best way to carry out cooperation, and build a company that is highly regarded by society. Three years ago, the collaboration between National Securities and Bank SinoPac was a good start. We are confident that SinoPac Financial Holding Company may one day become a more professional regional player in the market.