Regulators reject Waterland decision

The Financial Supervisory Commission yesterday rejected the Waterland Financial Holding's (國票金控) disputed decision to pay a pension to its former chairman, Walter Lin (林華德), who was ousted from the post last week.

Yet the financial regulator dodged a question as to whether it would punish Waterland's board of directors for making the illegal decision and if there is a timetable for the board to change the decision.

"The commission demanded Waterland and its wholly-owned subsidiary International Bills Finance Corp (國際票券) not to illegally give pension and merit pay to Lin," the commission's vice chairman Lu Daung-yen (呂東英) told a press conference yesterday.

The regulator defines the status of board directors as the company management based on regulations under the Corporate Law (公司法), and therefore Lin was not entitled to receive the pension pay as an employee, after his removal from the post, Lu said.

Additionally, on principles of corporate governance, decisions on board directors' pay or rewards should be left for shareholders to decide, not the board itself, the official said.

Lin was ousted from the chairmanship and board of both Waterland and International Bills Finance on June 7, for NT$1.95 billion worth of abnormal capital inflows from his wife Sophie Yeh (葉素菲), who was indicted for embezzling NT$7 billion from Procomp Infomatics Co (博達科技).

Lin hurried to file his resignation to the board on the morning of June 8, before the financial holding company signed for the commission's official notice on the same day, which granted him a pension and merit pay reportedly worth some NT$30 million.

As a superintendent on Waterland's board, the state-run Farmers Bank (農民銀行) has questioned the disputed decision and froze the pension payment made to Lin last week.

The commission yesterday asked the financial holding company to convene an emergency board meeting to rectify their doubtful decision in the near term.

Lu urged Waterland's board directors and superintendents to pay attention to their criminal and civil obligations imposed by related regulations in dealing with the pension issue. The official, however, declined to say if the financial watchdog would impose punishment on the board.

The commission will launch an investigation to find out which board members are at fault only if the board insists on paying Lin the pension in the future, Lu said.

The pension matter is not the only issue the board has to deal with in the emergency meeting, following the sudden resignation of Lin's successor, Harvey Liu (劉邦義), from Waterland's chairmanship and board directorship yesterday.

In a statement to the Taiwan Stock Exchange, the company did not explain Liu's resignation but said it will hold a board meeting in the near future to select the new chairman.

Liu retained his presidency of the company, which is due to hold an annual shareholders meeting on June 29 to select new board directors.

The company's spokesman Stephen Tsai (蔡德夆) was not available for comment as of press time yesterday.