Analysts speculate over BOT successor

The names of possible successors to Chen Mu-tsai (陳木在) as chairman of the Bank of Taiwan (台灣銀行) are already floating about in government circles, with vice ministers of finance Yang Tze-kiang (楊子江) and Susan Chang (張秀蓮) among them.

But Minister of Finance Lin Chuan (林全) yesterday said that no new appointments will be made before May 20 to replace Chen as head of the bank. Lee Sheng-yann (李勝彥), president of the Bank of Taiwan, will serve as the bank's acting chairman after Chen formally quits his post, Lin told a press conference yesterday morning.

On Tuesday, the ministry and KGI Securities Co (中信證券) recommended that Chen serve as chairman of China Development Financial Holding Corp (中華開發金控), after each secured seven seats on China Development's newly-elected 21-member board on Monday.

Chen's departure from the Bank of Taiwan and his new job at China Development are just part of the ever-changing business environment in the banking sector, as the government undertakes financial reform to clean up bad loans and improve banks' competitiveness.

Speculation was rife that KGI Securities would take charge of reshuffling China Development's professional management team -- including nominating the presidents and top managerial positions at China Development and its subsidiary industrial bank, but Lin shrugged off such rumors.

"It'll be a joint decision made and endorsed by the company's new board," Lin said.

"It's inappropriate for the ministry to be involved too deeply in China Development's future management reshuffle and its business operations since the government plans to gradually release its shares in and control over private companies," Lin said.

However, the government has no plans to release its shares in China Development in the near future, for fear of instability negatively affecting the company, he added.

Expressing satisfaction with the fact that the government earned seven board seats -- it previously held three -- at China Development, Lin encouraged Chinatrust Financial Holding Co (中信金控), which KGI is closely affiliated with, to increase its stake in the company, the share distribution of which is highly fragmented, for the purpose of ownership stability.

He also said that China Development's major shareholders will soon hold a board meeting to elect candidates for its seven-member standing committee, adding that the likelihood of chairwoman Diana Chen (陳敏薰) snatching one seat on the committee should be slim, since she has only four seats on the board.

Media had speculated that the ministry and KGI had agreed to reserve three seats each on the standing committee, while Diana Chen would get the remaining seat.