Taipei: Following reports of a physical altercation between Cathay United Bank (CUB) founder Tsai Chen-yu and bank Chairman Kuo Ming-jian, the bank on Wednesday attributed the incident to a "misunderstanding" about Kuo's multiple positions outside the bank.

According to Focus Taiwan, the bank stated that Kuo, in his mid-60s, disclosed his external work as legally required, and these positions have not impacted his responsibilities at the bank. The bank clarified that Kuo has not made any illegal profits from his external roles. The altercation, which occurred on Tuesday, stemmed from Tsai, in his early 70s, misunderstanding Kuo's external engagements. The bank urged both men to engage in rational discussions to resolve their differences.

Local media reported that the altercation began with verbal insults during a meeting in Kuo's Taipei office, escalating to a physical confrontation that required police intervention. Kuo has been serving as an independent director at AIchip Technologies Inc. since May 29, 2025, while also being a board member of Cathay Securities Investment Trust, an affiliate of the bank.

Both Cathay United Bank and Cathay Securities Investment Trust are fully owned by Cathay Financial Holding Co., Taiwan's largest financial holding company by total assets. According to Cathay Securities Investment Trust, due to internal oversight, the company's discretionary accounts, involving eight mutual funds, purchased AIchip shares while Kuo was an independent director at the tech firm.

The investment trust firm reported Kuo's involvement with AIchip and the subsequent investments in AIchip shares to the Financial Supervisory Commission (FSC) in January. The company also decided to recalculate the net worth of the affected mutual funds from June 30, 2025, to January 20, 2026.

Last week, the investment trust firm announced it would compensate investors in the eight mutual funds following the net worth recalculation, ensuring investors do not suffer any losses from the error. The recalculation resulted in a loss of NT$454 million (US$14.32 million) from the company's discretionary accounts. Media estimates suggest the firm could face losses of up to NT$600 million, including compensation.

Local news media reports indicated that the altercation between Tsai and Kuo was provoked by the financial losses, with Tsai angered by Kuo's external engagements. Cathay Securities Investment Trust announced on Tuesday that Kuo has resigned from his position as a board member of the company.

As Kuo took on a directorship at Longchen Paper and Packaging Co. on May 27, the FSC has requested Cathay Securities Investment Trust to investigate whether its mutual funds have investments in the paper company.