On his first day back to work at China Development Financial Holding Corp (中華開發金控), business tycoon Liu Tai-ying (劉泰英) yesterday faced mounting pressures from the Ministry of Finance to step down from the chairman's seat.
"Based on the principle of corporate governance, China Development has to present a report by June 20, explaining whether [12 corporate crime] charges against Liu have disqualified his chairmanship [at the nation's fourth largest financial services company]," said Gary Tseng (曾國烈), director-general of the Bureau of Monetary Affairs under the ministry at a press conference yesterday morning.
Citing a loosely defined regulation that allows the ministry to disqualify founders and chairmen of financial holding companies on the grounds of misbehavior, Tseng said that "[Liu] should put the benefit of China Development and its shareholders ahead of his own." Tseng, however, did not elaborate, but added that "the ministry has the final say on the matter."
Although the ministry's attempts to pressure Liu into stepping down voluntarily are growing, Liu yesterday played along and adopted a wait-and-see strategy while spending all day receiving briefs from over 20 top-ranking managers on the company's operations during his four-month absence in jail.
"Chairman Liu said that the company will hammer out a report [as requested by the ministry] by June 20 based on the benefit of the company's shareholders, instead of his own benefit," China Development spokeswoman Grace Fang (方鳳山) told reporters yesterday.
Fang, however, shrugged off media speculation yesterday that Liu is inclined to resign voluntarily, saying that "the chairman said nothing about it."
Shares of China Development yesterday rose by NT$0.4, or 3 percent, to close at NT$13.4.
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But he said that the stock price of the mega bank, which has a niche market in investment banking, may have difficulty climbing up to NT$14 in the near future since the economic downturn has upset the company's returns on its investment projects.
Expressing a neutral view over Liu's possible resignation, Fong said that "a reshuffle of the company's chairmanship may not do too much harm nor do any good to its future management, although a reshuffle will help sustain its stability."
Local Chinese-language news-papers yesterday speculated that, following his resignation, Liu's likely successor includes Paul Chiu (邱正雄), former finance minister and currently chairman of Grand Cathay Securities (大華證券) -- a China Development subsidiary -- while Diana Chen (陳敏薰), Liu's hand-picked acting chairperson, will be promoted to head China Development Industrial Bank (中華開發銀行).
But a China Development board member, who requested anonymity, yesterday said that few enjoyed as much clout as Liu to be capable of heading the company.
"Liu deserves credit as a professional corporate leader despite the fact he may have pulled strings to stretch the company's assets from some NT$5 billion in the 90s to the current NT$130 billion," the board member said, adding that many big-time shareholders still support Liu.
Liu, if he stays in office, will play a decisive role in the company's future investment projects and consolidation plans through mergers and acquisitions.
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