Pan-blues enraged over banks' share-swap plan

Enraged by what they called the government's disrespect for a legislative motion issued last month, opposition lawmakers yesterday demanded that half of the government-appointed board of directors at state-controlled Taiwan Cooperative Bank (合作金庫銀行) and Farmers Bank of China (農民銀行) be replaced immediately as punishment.

The legislature's finance committee advanced a motion on Oct. 3 demanding that the controversial second stage of financial reforms be halted and that the government stop releasing, swapping or transferring its stocks in state-owned financial institutions until Vice Premier Wu Rong-i (吳榮義), who was commissioned to oversee the reform of the banking sector, comes to the committee meeting to defend the policies. Lawmakers have raised strong concerns that the financial reforms could end up benefiting conglomerates while depleting state coffers.

The board of directors at both Taiwan Cooperative and Farmers Bank on Tuesday approved a full share-swap deal to merge these two lenders, triggering strong dissatisfaction among lawmakers at a committee meeting yesterday.

Chinese Nationalist Party (KMT) Legislator Lai Shyh-bao (賴士葆) accused the Ministry of Finance of defying the legislative motion so as to meet President Chen Shui-bian's (陳水扁) goal of halving the number of state-run banks to six by the end of the year.

Speaking in a high, angry voice, People First Party Legislator Christina Liu (劉憶如) criticized the companies' government-appointed directors for failing to represent public opinion and comply with the legislative motion.

"If the board makes any unreasonable proposal, these independent directors should at least put their objections on record," Liu said.

Minister of Finance Lin Chuan (林全) explained that the boards had merely submitted a new proposal, and that the merger would only take effect if it clears the provisional shareholders' meeting scheduled for Dec. 28.

Nonetheless, Liu submitted a proposal that the ministry replace half of the government-appointed directors at the two banks.

The proposal received the support of KMT Lawmaker Fei Hung-tai (費鴻泰) and was approved as a major resolution during the meeting. The ministry has the right to decide who should be replaced, Liu said.

Liu's proposal would entail four board members of Taiwan Cooperative Bank and six at Farmers Bank of China being supplanted.

Lin said that the ministry respects the resolution and will evaluate how to deal with it. He refused to elaborate.

The committee is scheduled to review the privatization plan of the state-owned Central Trust of China (中央信託局) today. The plan is also expected to meet with challenges and disagreements from opposition lawmakers.