Taiwan's Taishin Fin denies rumours of impropriety

TAIPEI, Aug 19 (Reuters) - Taishin Financial (2887.TW), reeling from a sell-off of its stock, dismissed Tuesday rumours of impropriety in its ongoing merger with Chang Hwa Commercial Bank (2801.TW).

Taishin's shares fell by their 7 percent limit on Monday, amid a broader sell-off of financial shares that saw the banking and insurance sub-index .TFNI tumble 4.8 percent. Shares in Chang Hwa closed down 4.2 percent.

The sell-off came amid market talk of possible impropriety regarding Taishin's acquisition of Chang Hwa, amid an unrelated money-laundering investigation targeting former President Chen Shui-bian.

"This speculation is not only without any basis, but is also a major smear," Taishin said in a statement carried in newspapers.

(Reporting by Doug Young; Editing by Jonathan Hopfner)