China Development names chairperson

China Development Financial Holding Corp (開發金控), the nation's fourth-largest financial company, yesterday named 33-year-old Diana Chen (陳敏薰) as temporary chairperson in the absence of chairman Liu Tai-ying (劉泰英).

On Monday, Liu, 66, was detained by the Taipei District Court on charges of corruption and embezzlement in the Zanadau Development (新瑞都) scandal.

Chen was hand-picked by Liu himself and approved at the company's board meeting yesterday, Shih Jer-shyong (施哲雄), China Development's executive vice president said.

"Besides being a board member [since 1998], Chen has also been an investment adviser to the company," Shih said, adding that Liu has a very close relationship with Chen's father.

Satisfied with Liu's leadership, Shih said the company has no plans to select a new chairman to replace Liu. The company expects Liu to make an appeal to the court to clear his name.

"Chen's time as chairperson will end the moment chairman Liu is released," China Development's spokeswoman Grace Fang (方鳳山) said.

According to China Development, Chen heads the direct investment department at Lilontex Corp (理隆纖維) -- a family-run business.

With an MBA from California's Claremont Graduate University, Chen is responsible for Lilontex's corporate-venture program in in the biotechnology and informataion-technology sectors. She also serves on board of directors for China Development Industrial Bank (開發工銀).

Despite the announcement, China Development shares traded 1.1 percent higher yesterday to close at NT$14.05.

After Liu's detention, some stock analysts expressed concern that the business tycoon's involvement in the scandal would cause short-term jitters among investors, but Chang Ya-hsiu (張雅琇), an analyst at Polaris Securities Co (寶來證券) said that the impact on the company should be minimal.

"Investors had taken the incident into consideration before [when] Liu was previously taken in twice for questioning," Chang said.

Liu's detention came after two previous requests by prosecutors failed. Investigators released Liu on Nov. 28 after a day of questioning over alleged kickbacks received in exchange for providing financing for Zanadau property developments including an amusement-park project in 1998.

It appears that Liu will retain control of the company for the time being, Chang said. She warned, however, that China Development may face other challenges if internal issues are not addressed.

"Employees may worry that a new chairman will trigger a management reshuffle," Chang said.

According to Shih, China Development posted after-tax earnings of NT$6.4 billion last year and forecast a profit of NT$10 billion for this year.