Sat, Jan 04, 2003 page10

• Chunghwa defends chairman after ouster report

  POPULAR BOSS Workers and executives of the telecom company defended their firm's chairman, Mao Chi-kuo, after media reports that the government plans to replace him

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  Chunghwa Telecom Co (中華電信) executives and workers rallied to the defense of Chairman Mao Chi-kuo (毛治國) after local media reports that he may be ousted by the government, which owns 82 percent of the nation's biggest phone company.

  The Commercial Times newspaper, citing Minister of Transportation and Communications Lin Ling-san (林陵三), said that Mao would be replaced by someone closer to the ruling DPP party. The Economic Daily said a successor may be named as early as Jan. 14.

  The ministry denied the reports.

  Possible candidates to replace Mao include Tsai Duei (蔡堆), vice minister of transportation and communications, Lu Chi-cheng (呂桔誠), vice chairman of the Commission of National Corporations, and Kung Chao-sheng (龔照勝), former director of Credit Suisse First Boston Taiwan, reports said.

  Mao's three-year term is scheduled to end in June 2005, according to Mao's office.

  "This is a very political issue. Higher levels of the government may be involved," said Chen Hsin-chu (陳幸助), a Chunghwa Telecom spokesman. "He's done a good job. Why should Mao be replaced?"

  President Chen Shui-bian's (陳水扁) DPP government has continued its predecessor's tradition of placing political supporters at the helm of companies the government controls. In October 2000, it named ruling-party member Jerome Chen (陳建隆) as chairman of state-controlled First Commercial Bank (第一銀行), the largest publicly traded lender.

  Last month it dumped China Steel Corp (中鋼) Chairman Kuo Yen-tu (郭炎土) after the DPP won a slimmer-than-expected victory in the mayor's race in Kaohsiung, where China Steel's work force of 8,700 makes it among the city's biggest employers. The government also owns controlling stakes in Hua Nan Financial Holding Co (華南金控), which owns Taiwan's fifth-largest lender, and China Airlines Co (華航), the nation's largest carrier.

  Standard & Poor's, which cut Taiwan's rating to AA- in December, chastised the government for letting politics interfere too much with business.

  "The possibility Mao will be replaced is pretty high," said George Wu (吳裕良), analyst at Primasia Securities Co. "The situation is similar to China Steel. President Chen needs people who can help him get votes in the next presidential election. Professional qualifications are not what's important. Loyalty and influence over voters would take priority. Chunghwa Telecom is bigger than China Steel."

  Chunghwa shares were unchanged today after dropping almost one percent in early trading. They closed at NT$51.
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