Fri, Dec 20, 2002 - Page 10 News List

Utility chief asked to head China Steel

QUESTIONABLE MOVE The government has decided to replace a man with decades of experience in the steel industry with one who has a suspect track record in business

BLOOMBERG AND AP , TAIPEI

The Taiwan government nominated a man who lasted only two months at the helm of the nation's biggest power company to replace the ousted chairman of state-run China Steel Corp (中鋼).

Lin Wen-yuan (林文淵), 50, was chosen to take over Taiwan's largest steelmaker from Kuo Yen-tu (郭炎土), 65, who is being forced out because the government says he's too old for the job.

It's unclear what the government hopes to achieve with the reshuffle. Analysts and steel workers are questioning Lin's appointment because he has no experience in the steel industry.

Also, Lin was forced to resign from Taipower in May after only 69 days as president because of a bungled power-rationing program earlier this year that affected hundreds of high-tech companies.

Since July, he's been chairman of Taiwan Cogeneration Corp (台灣汽電共生), an electricity supplier one-third owned by Taiwan Power. From 1979 to 1998, he worked for the Taipei Water Department.

"He will not be as good in promoting the company because he lacks a strong background in the industry," said Simon Chao, who helps manage NT$700 million (US$20 million) in equities at President Investment Trust Corp. "Kuo knows the industry well and is regarded as a strong figure by peers."

Economics Minister Lin Yi-fu (林義夫) said the appointment must be approved by the cabinet. Shares of China Steel, in which the government owns 40 percent, closed unchanged today at NT$19.50.

The stock has fallen 1.5 percent since Kuo's ouster was first reported on Dec. 16.

Taiwan media have said Kuo is being removed because he failed to help boost ruling-party support in mayoral elections in Kaohsiung, where China Steel is based and employs 8,700.

His successor is a party loyalist. Lin took charge of the NT$1 billion budget for the campaign that helped Chen Shui-bian (陳水扁) win the presidency in 2000. He had left the Taipei Water Department at the end of 1998 after the Nationalist Party's Ma Ying-jeou (馬英九) beat Chen to become the capital's mayor.

Lin was vice chairman of the Commission of National Corporations before being named head of Taiwan Power in March.

His appointment to the China Steel job comes a day after credit-rating company Standard & Poor's criticized Taiwan's government for political interference in business.

Kuo yesterday canceled a morning meeting with the media, where labor and management issues, and his own fall from grace, were on the agenda.

Lin will inherit a company that investors say has been run well and is recovering from a steel industry slump. China Steel said this week it expects 2003 profit to rise four-fifths, to NT$29.2 billion, because of a price increase that takes effect in the first quarter.

"China Steel should continue to do well since the industry is in a cyclical demand upturn," Chao said.

Kuo told TVBS cable news yesterday that he was preparing to accept his replacement, saying that he planned to "get some sleep and then go and find a new job."

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