KGI nominees vow to do better

"As far as I understand, employees at China Development are currently underpaid since most received no salary raise in the past three years."

David Chen, chief executive officer of Chinatrust Venture Capital Corp

Two nominated by KGI Securities Co (中信證券) to sit on China Development Financial Holding Corp's (中華開發金控) board yesterday vowed to improve the company's corporate governance and transparency if they were elected in the April 5 vote.

"Stressing the importance of professionalism, KGI plans to set up four sub-committees on the board including a corporate governance committee, an audit committee, a salary committee and an investment committee," David Chen (陳鑫), chief executive officer at Chinatrust Venture Capital Corp (中信創投), told reporters yesterday afternoon.

Each of the four committees would comprise five to seven members, Chen said.

Chen that the share price of China Development had declined during the past six years. With a total of NT$90 billion in domestic and overseas re-investments, China Development made NT$15 billion in annual capital gains, which he described under-performing.

"We hope to achieve a 15 percent return on equity this year," Chen said, adding that a re-evaluation of China Development's 400 re-investment projects would be conducted to determine their feasibility and prospects.

KGI, headed by Angelo Koo (辜仲瑩), owns more than 6 percent of China Development, making it the company's biggest private shareholder. It has partnered with the Ministry of Finance to conduct a proxy solicitation campaign, competing with China Development chairwoman Diana Chen (陳敏薰) to dominate China Development's new 21-member board.

Asked there would be a management reshuffle following the vote, Chen said KGI had no such plan. But he stressed that KGI didn't rule out the possibility of bringing in top-tier investment banking talent from Chinatrust to China Development.

KGI plans to introduce new incentive measures including employee stock options and a new bonus system to boost employees' morale at China Development, Chen said.

He said China Development employees would be allowed to buy the company's stocks at reduced prices and to sell the shares in two years if they had risen.

"As far as I understand, employees at China Development are currently underpaid since most received no salary raise in the past three years," Chen said.

He refused to promise a raise if KGI took over China Development's board, but "a reasonable salary structure will be implemented," he said.

KGI's candidate, Tung Chao-chin (童兆勤), CEO of Trace Storage Technology Corp (和喬科技),said he resented the faction culture at China Development,which he said might have seriously imperiled the company's management and performance.

He vowed to set up proper communication channels for employees to reflect opinions.

"However, KGI will be ruthless in getting rid of those who attempt to create small interest groups within the company," Tung added.

One after KGI officially kick-started its campaign of proxy solicitation, Sherie Chiu (邱德馨), chief financial officer at KGI, said yesterday that some 270,000 China Development shareholders has shown up at the company's outlets to collect notes for China Development's annual giveaway -- a coffee maker worth NT$1,200.