Taiwan Ratings head `determined' to resign

Despite the upcoming shake-up of ownership later this month, Chen Chung-hsing (陳松興), president and CEO of Taiwan Ratings Corp (中華信評) -- the local arm of Standard & Poor's (S&P) -- yesterday confirmed that he is determined to step down and advised his future successor to be as "outspoken" as he is.

"After more than six years in office, there's no likelihood that I'll stay," Chen said yesterday, "I believe I have helped lay down a solid foundation for Taiwan Ratings to face new commercial competition."

Established in May 1997, the agency is Taiwan's first credit rating services organization that claims to have over 160 corporate clients, including banks, bills finance companies, securities firms, insurance companies and corporations.

The local media have widely speculated that Chen's resignation has something to do with pressures from the government, which some market watchers believe is displeased with Chen's outspokenness and may attempt to manipulate the company's management by seeking a replacement for him.

Chen denied the speculation, saying that he had long proposed to leave the position late last year before his (second) term ended in February. He said he was granted an oral permission from board members at that time to step down.

But repercussions from his resignation involve negotiations on future ownership of the agency between the government and S&P, which owns 50 percent stake in Taiwan Ratings.

S&P has proposed acquiring the remaining 50 percent stake owned by government-controlled agencies -- including the Taiwan Stock Exchange Corp (TSEC, 證交所), Taiwan Securities Central Depository Co (台灣證卷集中保管公司) and China Credit Information Service Ltd (中華徵信所) -- at the agency's board meeting scheduled for June 27 in Taipei.

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.

However, it appears that the ministry has no plan to resell part of its shares to the private sector, putting a deadlock to the S&P's buyout plan.

It is, therefore, speculated that the DPP government may soon appoint a new candidate to take over Chen's presidency while S&P will also nominate a new chairman to the board, as agreed by both parties.

While declining to elaborate on who's going to take over his position, Chen urged his future successor to speak his or her mind when it comes to professional judgement since it's the company's obligations to warn of any market risks to both clients and investors.

Local media, however, have speculated that TSEC's senior executive vice president Chan Tsai-hung (詹彩虹) may be tapped by the Chen Shui-bian (陳水扁) administration to head the company.

Chan is the wife of former DPP secretary-general Wu Nai-jen (吳乃仁) who is currently the chair of the state-run Taiwan Sugar Corp (台糖).

But a Taiwan Ratings official yesterday called Chan's expertise into question. The official, who requested anonymity, said that Chan -- a senior banker -- has no experience in the rating business and may not live up to the post's professional requirements.

"The morale among employees sank once we heard that she may come to head the company," the official said, adding that possible candidates including Chan may have a hard time working in the capacity of company chief if their political connections are too complicated.