Fri, Mar 10, 2006 - Page 12 News List

Chinatrust reminded of stock promise

By Jackie Lin  /  STAFF REPORTER

The Chinatrust Group (中信集團) must increase its stake in China Development Financial Holding Co (開發金控) to 15 percent as promised by June next year, or risk losing its management position, Minister of Finance Joseph Lyu (呂桔誠) said yesterday.

China Development is to elect a new board of directors by the middle of next year.

"If China Development president Angelo Koo (辜仲瑩) [from Chinatrust Group] fails to uphold his promise [of raising the shareholding], government-appointed board directors will not support him in the next election," Lyu said when answering questions from Democratic Progressive Party (DPP) Legislator Lin Chung-mo (林重謨) at the legislature yesterday.

It was the first time the minister had clarified his stance on the matter since he took over the government post in January.

Koo, whose KGI Securities Co (中信證券) has a stake of more than 6.2 percent in China Development, teamed up with the ministry -- which has a 6 percent stake in China Development -- to secure the majority of seats on China Development's board in April 2004.

Chinatrust has recently come under pressure from lawmakers after it reportedly bought a stake of around 8 percent in state-run Mega Financial Holding Co (兆豐金控), approaching the 10 percent limit it is allowed to acquire while remaining reluctant to increase its shareholding in China Development.

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