Wed, Mar 29, 2006 - Page 12 News List

Government's pick changes his mind

MEANINGLESS The man chosen to be the new chairman of China Development Financial Holding yesterday turned down the job, citing questions over his integrity

By Amber Chung and Jackie Lin  /  STAFF REPORTERS

The former president of Mega Financial Holding Co (兆豐金控), Lin Tzong-yeong (林宗勇), announced late last night that he would turn down the government's offer to chair the China Development Financial Holding Company (中華開發金控).

Lin was appointed by the Ministry of Finance on March 20 to replace Chen Mu-tsai (陳木在), the outgoing chairman of China Development Financial, the nation's sixth-largest financial service provider by market value.

This was after the ministry decided to remove Chen from his post, citing incompetence in performing his duties, following his role in a merger deal -- in which China Development Financial launched a hostile takeover of Taiwan International Securities Corp (金鼎證券) -- that reportedly benefited certain China Development Financial shareholders over others.

But over the last few days, Lin has come under mounting criticism from legislators, especially as he is still under investigation for his alleged involvement in a financial scandal.

Moreover, the Koo family -- which controls seven seats of the 21-member board and retains the presidency of the financial holding company -- has remained strongly opposed to Lin's appointment since it was announced last Monday and instead asked the ministry to offer more choices for the position.

"I will not take any government-appointed positions in any financial institutions until any questions involving my integrity are resolved," Lin said in the statement released late yesterday.

Lin said he made the decision after seeing how the recent management dispute within China Development Financial's boardroom had greatly affected the company's business development, the interests of shareholders and the rights of employees.

"It's meaningless to participate in management if my seat on the board cannot allow me to exercise my expertise and benefit the company," the statement read.

Minister of Finance Joseph Lyu (呂桔誠) yesterday expressed regret over Lin's decision to turn down any government-appointed post. He said the ministry would decide on another candidate to serve as the new chairman of China Development Financial as soon as possible.

Lyu said Lin has expressed his unwillingness to take the post over the past two days and despite the all-out efforts of the ministry to persuade him to stay, Lin insisted on turning down the offer.

The ministry was tight-lipped as to whether it has found anyone to fill the post, saying only that it takes time to evaluate the credentials of any possible candidates.

"As soon as the person is selected, we'll demand that Chen and China Development Financial convene a board meeting to choose the new chairman," Lyu told reporters.

Although Chen has avoided responding to the ministry this week, Lyu said he has confidence that Chen will help the ministry end the controversy soon.

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