Yuanta says no designs on Fuhwa

Yuanta Core Pacific Securities Co (元大京華證券), the nation's largest brokerage, denied yesterday that it has vowed to take over the helm of Fuhwa Financial Holdings Co (復華金控) this June, dismissing newspaper reports as being the result of miscommunication.

On Sunday, Chang told reporters that the brokerage has become the biggest shareholder in Fuhwa Financial after securing a controlling stake of 20 percent, in line with its chairman Rudy Ma's (馬志玲) vow last year to set up a financial holding company within two years.

Chang also said on Sunday that Yuanta is highly interested in taking over Fuhwa's management, which is slated to reshuffle its board in June, according to newspaper reports.

But Yuanta yesterday released a written statement clarifying that the brokerage has only a 9 percent stake in Fuhwa Financial.

`Misinterpreted'

In a phone interview with the Taipei Times yesterday, Yuanta vice president Lawrence Lee (李雅彬) said the media misinterpreted Chang's remarks.

He suggested that Chang might have meant that Yuanta may be able to secure a 20 percent stake after rallying support from other shareholders.

Chang wasn't available yesterday for comment and clarification.

Lee did confirm that Yuanta has increased its stake in Fuhwa by a percentage point from its previous 8 percent holding.

"Yuanta is highly interested in Fuhwa Financial," he said.

Lee also admitted that he has no knowledge of how many Fuhwa shares the Ma family has personally acquired.

Lee denied that Yuanta is seeking support from the Ministry of Finance, which owns a 14 percent stake in Fuhwa, to overtake the Chinese Nationalist Party (KMT) as the financial service provider's biggest shareholder. The KMT has a 19 percent stake in Fuhwa.

"No contacts have been made as far as I know," Lee said.

Yuanta, with a net worth of NT$59.4 billion, holds a 9 percent market share with a total of 107 branches nationwide, according to Lee.

Rivalry

The market is rife with speculation that Yuanta is competing fiercely with the Koo Family's Chinatrust Financial Holding Co (中信金控) to take control of Fuhwa in the upcoming boardroom battle.

In November, Chinatrust was rumored to have bought out Central Investment Holding Co (中央投資), into which the KMT has moved some of its disputed assets. At the time, Chinatrust chairman Jeffrey Koo (辜濂松) denied any such deal.

Should either Yuanta or Chinatrust grab a controlling stake in Fuhwa, we may see tactics similar to those used by Koo's second son, Angelo Koo (辜仲瑩), earlier last year to oust Diana Chen (陳敏薰) from the chairman's post at China Development Financial Holding Co (開發金控) at the upcoming proxy vote war in Fuhwa's boardroom this summer.

Last April, Angelo Koo, whose KGI Securities Co (中信證券) has more than a 6.2 percent stake in China Development, teamed up with the Ministry of Finance -- which has a 7 percent stake in China Development -- to secure the majority of seats on China Development's board while toppling Chen at the same time.