The eldest son of a Taiwanese businessman has filed a
lawsuit to void a transfer of $15 billion of assets which were switched to Bermuda-based
offshore, non-charitable trusts, which he says threaten loss of control over a
business empire.

The son is Dr Winston Wong, offspring of the late Yung-Ching Wang,
who founded Taiwan's Formosa Plastics Group. The suit, filed in the Supreme Court of Bermuda, aims
to “invalidate the transfer of assets that are now valued at more than $15
billion, to four offshore, secret, non-charitable trusts,” according to a
statement from Wong’s legal counsel.

The assets covered by the lawsuit include millions of shares
of FPG's "four treasures" - Formosa Plastics, Formosa Chemicals &
Fibre, Nan Ya Plastics and Formosa Petrochemical Corp. The assets “could hold
the key to control of the iconic Taiwanese conglomerate,” the statement said.

This publication was unable to reach Formosa Plastics Group
at the time of going to press. Inquiries by emails were not returned.

The case highlights the use of offshore trusts and issues
that can arise when they are, as alleged in this case, used to take partial or
whole control of a particular business.

Implications

“The lawsuit, which marks a critical point in Dr Wong's
long-standing efforts to restore his late father's legacy, has profound
implications for the future of FPG. If the Bermuda
court rules that the transfer of YC Wang's FPG stake to the offshore trusts
should be undone, it would affect the current management and control of FPG,”
the statement said. If Dr Wong wins the case, the Taiwanese government could
receive an estimated NT$158.4 billion to NT$237.6 billion ($5.3 billion to $7.9 billion) in various taxes, the statement said.

“Excluding stock held by other FPG companies, the offshore
trusts currently are the largest shareholders of Formosa Plastics and Formosa
Chemicals & Fibre, and the second largest shareholders of Nan Ya Plastics
and Formosa Petrochemical. These holdings have never been declared by FPG to
its shareholders nor to Taiwanese regulators,” the statement continued.

The statement said Dr Wong has carried out a four-year
investigation that revealed the following information: 1, that the trusts are
non-charitable; 2, that the trusts were established in secret by a minority of
YC Wang's family; 3, that the assets were transferred into the trusts without
his father's consent; and 4, the trust assets should have been declared as part
of his late father's estate.

The lawsuit claims that the transfer of YC Wang's assets
into the trusts is invalid and that the assets should returned to “their
rightful” owners: YC Wang's estate and legal heirs, the statement added.

The lawsuit names as defendants: the Grand View Private
Trust Company (established in 2001), Transglobe Private Trust Company
(2002), Vantura Private Trust Company (2005), and Universal Link Private
Trust Company
(2005) - all of which are incorporated in Bermuda.

Hung Wen Hsiung, the late YC Wang's long-time personal
financial advisor, is also named as a defendant for his role in creating the
trusts and transferring YC Wang's assets to the trusts, the statement added.