Waterland fights off rebellion

Waterland Financial Holdings Co (國票金控), the nation's smallest financial service provider by assets, yesterday called on the government to act as a mediator as rebel shareholders are seeking to oust the current management ahead of a general meeting next month.

The financial services provider is slated to select a new board of directors and superintendents at a shareholders meeting on June 29.

The current management, led by chairman Walter Lin (林華德), is estimated to own a 6 percent stake in the company.

The rebel shareholders include the Miramar Group (美麗華), which is said to have a 5 to 10 percent stake in Waterland; Macoto Bank's (誠泰銀行) chairman Lin Cheng-yi (林誠一), who reportedly owns a 2 percent stake; and Kuo Hua Life Insurance Co (國華人壽), which holds a 9.8 percent stake.

State-run banks, including Taiwan Cooperative Bank (合作金庫銀行) and the International Commercial Bank of China (中國國際商銀), control around 13.5 percent of the financial holding firm.

"We believe our board of directors and management team can help continue the company's bright performance and sustainable development," Waterland Financial president Harvey Liu (劉邦義) said at a press briefing yesterday.

In a bid to solicit more proxy votes for the current management team, Waterland Financial yesterday revealed its first-quarter earnings. The firm reported after-tax net income of NT$960 million, or NT$0.45 per share, in the January-March quarter, up 29.8 percent from a year ago. For last year, the company reported earnings of NT$3.25 billion, or NT$1.54 per share, with a cash dividend of NT$1.4 per share.

The Chinese-language news media have recently speculated that rebel shareholders may have accumulated up to a 40 percent stake and are likely to support Hung San-hsiung (洪三雄), chairman of the Taiwan Financial Asset Services Corp (台灣金服公司), to contend for Waterland's chairmanship in the election.

Another player, Nice Group (耐斯), has held more than 10 percent of the company for over a year, and as a result is qualified to request shareholders proxy votes. Nice, which has been non-committal on the issue, said it expects to control over 25 percent of votes, according to Chinese-language reports.

Liu declined to confirm if Lin has approached Nice for support.

Liu said the company hopes that the state-run banks holding its shares and the Ministry of Finance will be able to make the best management choice for shareholders.

In response, Minister of Finance Lin Chuan (林全) declined Waterland's request, saying that the government would not get involved in complicated management struggles in private financial institutions.

"[The ministry] will leave the issue for [Waterland's] state-run bank shareholders to make their own decision," Lin said.

He said the ministry could, however, provide a similar service to that it had provided for private shareholders of Fuhwa Financial Holdings Co (復華金控).

Last month, the ministry helped mediate an agreement between the government, Yuanta Group (元大集團) and the Chinese Nationalist Party (KMT), which controls Fuhwa Financial.