China Development to meet as pressure on Liu builds

An ultimatum from the Ministry of Finance (MOF) may have forced business tycoon Liu Tai-ying (劉泰英) to call an emergency board meeting tomorrow to determine whether the former KMT money man can remain chairman at the nation's fourth largest financial service institution -- China Development Financial Holding Corp (中華開發金控).

Last week the government asked China Development to decide the fate of Liu -- indicted in a financial scandal -- by June 20.

A total of 19 board members and two supervisors from both China Development Financial and its subsidiary China Development Industrial Bank (開發工銀) are scheduled to attend the meeting tomorrow afternoon, according to spokeswoman Grace Fang (方鳳山).

Fang refused to say if the board would discuss whether Liu's indictment disqualified him from remaining chairman at the financial holding company and the bank.

"The meeting's agenda is to discuss the future of China Development and no vote will be cast on any chairmanship reshuffle," she said.

Fang's comments appeared to suggest that Liu may refuse to step down voluntarily and his fate at the company may not be totally in the hands of board members, since a majority of them support him.

Of the 19 board members, at least 10 members are expected to throw their support behind Liu, while the position of the remaining six members is unclear. The government controls three seats, according to local media reports.

Nevertheless, local Chinese-language media yesterday speculated that the increased pressure from the MOF may force the board to dismiss Liu tomorrow.

Pressed by the media at a press conference yesterday, Finance Minister Lin Chuan (林全) called Liu's qualifications to be the company's chairman into question.

"If any of the [12] charges are proven to be true, Liu should be immediately disqualified based on the principle of a lack of trustworthiness," Lin told reporters.

Lin later seemed unsure, saying the decision would "be made by the company's board, not by the MOF, although the MOF has a final say in the matter."

PFP Legislator Norman Yin (殷乃平) yesterday argued that the MOF should wait for a conviction before it made any decision to disqualify Liu.

"Or at least the MOF should present solid evidence that says Liu's resuming office risked the company's operation and the rights of depositors," Yin said.

Otherwise, the MOF would be abusing its administrative power over the financial institution by taking a tough stance to pressure its chairman into stepping down, Yin said, adding, "Liu's stepping down is actually a matter of when, not a matter of if."

It usually takes two to three years to conclude trials of white-collar crime, which Lin Chuan argued yesterday is "too time-consuming."

DPP legislator Chiu Tai-san (邱太三), however, said the MOF should act sooner rather than later.

He said that the MOF, as a regulator, should step in to correct legally troubled management at large banks, which he called "would-be financial monsters."

Liu should step down to set an example among bankers, he said.

A government-appointed board member at China Development, Lee Sheng-yann (李勝彥), president of the Bank of Taiwan, had previously said that "higher moral standards should be adopted to review bankers' qualifications."