An attempt by Chen Chung-hsing (陳松興), president and CEO of Taiwan Ratings Corp (中華信評), to resign from the local arm of Standard & Poor's has complicated both the upcoming shakeup of the corporation's ownership and its future management, analysts said yesterday.
After six years in office, Chen reportedly submitted his resignation to the board, a local newspaper reported yesterday. However, Chen, who helped found the local branch of the international rating agency six years ago, wasn't available for comment yesterday.
Chen's reported resignation comes just week's before the agency's board meeting scheduled for later this month.
According to Taiwan Ratings, its parent company Standard & Poor's (S&P), which owns 50 percent in stake, has proposed acquiring the remaining 50 percent -- shares owned by government-controlled agencies including the Taiwan Stock Exchange Corp (證交所), Taiwan Securities Central Depository Co (台灣證券集中保管公司) and China Credit Information Service Ltd (中華徵信所).
Cecile Saavedra, S&P's Asia-Pacific managing director, is due to arrive in Taipei on June 25 to begin acquisition negotiations with Ministry of Finance officials.
PFP Legislator Norman Yin (殷乃平), who is also a finance professor at National Chengchi University, yesterday backed S&P's plan to buy a majority of shares in Taiwan Ratings.
"To earn credibility among international investors, it will be a plus for Taiwan Ratings to be fully incorporated into S&P and to adopt stricter international rating criteria," Yin said.
He said, however, that the agency should remain independent of the government and avoid any government interference.
Yin added S&P's interest in Taiwan's markets appears to be gaining momentum now that two of its competitors -- Fitch Ratings and Moody's -- have been gearing up to reinforce their local operations.
One industry analyst, who preferred to remain unnamed, said local shareholders should have influence in the company's management to nurture local rating experts.
The analyst said local rating experts generally have a better knowl-edge of the nation's markets and companies than their expatriate peers.
Securities and Futures Commission Vice Chairman Wu Tang-chieh (吳當傑) agreed with that view, but said the government will remain neutral in S&P's negotiations.
Yin praised Chen's performance and professionalism at Taiwan Ratings, saying that his outspokenness has displeased the government, which may attempt to manipulate the company's management by seeking a replacement for Chen.
Chen has constantly criticized government's progress in financial reforms and his opinion on various solutions to clean up the nation's NT$1 trillion in bad loans have often been used by others to attack the government.
Meanwhile, a Taiwan Ratings official said employees were shocked yesterday to hear about Chen's reported resignation.
"Even though his second [three-year] term ends this month, we all thought that he would remain in office, since no better replacement for him can be found at home," said Josephine Juan (
Chen has insisted in maintaining the company's impartiality when it comes to ratings and dismissed efforts to pressure it, Juan said.
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