The drawn-out merger talks between Fuhwa Financial Holding Co (
Fuhwa Financial, the nation's 11th-largest financial holding firm, is scheduled to hold its general meeting on June 12, when the shareholders will discuss whether to convene an ad hoc meeting and reselect board directors and supervisors within 60 days from then, the company said in a filing to the Taiwan Stock Exchange late on Friday.
The announcement came after one of the company's minor shareholders, who is also a board member, proposed reshuffling the board in the hope of facilitating the protracted merger with Yuanta Group, which owns the nation's largest securities brokerage, Yuanta Core Pacific Securities Co (
Minor shareholders who own a stake of at least 1 percent are entitled to put forth proposals to be discussed at the general meeting, according to Article 172-1 of the Corporate Law (公司法). The regulation, which took effect in February, was designed to protect minor shareholders.
Yuanta Group, which holds a stake of more than 30 percent in Fuhwa Financial, secured four of the nine board seats last June and sought to take over the company by the end of last year. However, the timetable was pushed back to the end of this year, as the Chinese Nationalist Party (KMT), which controls a 23-percent stake and three board seats, disagreed with the terms that Yuanta Group had offered.
The government controls a 14-percent stake and two board seats of Fuhwa Financial.
"Whether the strategy can work will depend on the government," an analyst who tracks the nation's finance sector said on condition of anonymity.
It will not be as easy as had been expected for Yuanta Group to swallow Fuhwa Financial if the government opposes shuffling the board, the analyst said.
The Ministry of Finance, which manages state shareholding in financial institutions, said yesterday that the government would be unlikely to support the plan if it were to jeopardize the government's rights and interests.
In response, the Central Investment Holding Company (中央投資公司), which represents the KMT's holdings in Fuhwa Financial, said that it opposed the proposal and might raise its shareholding to safeguard its power, according to a report in the Chinese-language media yesterday.