Finance ministry to gain control of state-run banks

The Ministry of Finance yesterday flexed its muscles to successfully secure a majority of seats in reshuffled boards of the nation's major state-controlled banks, as well as the Mega Financial Holding Co (兆豐金控).

After grabbing eights seats in Mega Financial's 15-member board, the ministry's hand-picked chairman, Cheng Shen-chih (鄭深池), also garnered enough support from private shareholders to stay on in his three-year post at the company's shareholder meeting yesterday.

Mega is the nation's third-largest financial services company by market value.

Before yesterday's shareholder reshuffle, many individual shareholders questioned Cheng's managerial ability and his close relationship with President Chen Shui-bian (陳水扁), which they argued may pose a conflict of interest as he may use the bank's resources to stump for Chen.

But Cheng yesterday assured the company's shareholders of his professionalism.

"If I don't perform well and professionally, I'll step down myself -- whether the government supports me or not," Cheng told the shareholders' meeting yesterday morning.

The ministry yesterday also secured six seats on Chang Hwa Bank's (彰化銀行) 15-member board.

Chang Hwa chairman Chang Po-shin (張伯欣), a candidate supported by the MOF, also won his reelection bid with support from private shareholders at yesterday's shareholders meeting.

Investor approval

"[Not only the government, but also] private shareholders gave their approval to Chang's performance as the bank's chairman for another three years," said Hsieh Chao-nan (謝昭男), executive vice president of Chang Hwa.

Under Chang's leadership, Chang Hwa aggressively cleaned up its bad loans last year, a move that pushed the bank into the red.

Over at the Taiwan Business Bank (台灣企銀), the entire 15-member board was taken over by the Bank of Taiwan (台灣銀行), which grabbed five seats.

The ministry grabbed four seats, while the First Commercial and Chang Hwa Bank each secured two seats and Hua Nan Commercial Bank (華南銀行) and Land Bank of Taiwan (土銀) each secured one seat, the bank's statement said.

China Bills Finance Corp (中華票券) yesterday reshuffled its nine-member board and the ministry grabbed seven seats while securing two seats in its three-member supervisory board.

China Bills' incumbent chairman, Tseng Chien-cheng (曾建成), formerly president of First Commercial Bank, also won another three-year term at his post, according to the financial corporation's vice president Alex Tu (涂國城).

Under Tseng's two-year leadership, China Bills' pre-tax earning per share reached NT$1.91 last year, Tu said.