Financial experts debate about state management

The government's management team governing state shareholding in financial institutions should clearly declare its stance and solicit proxy votes to safeguard the government's power on the board, industry experts said yesterday.

Political, business and academic representatives gathered yesterday at the Ministry of Finance to discuss how to strengthen the state shareholding management mechanism at the finance panel's second preparatory meeting prior to the Economic Sustainable Development Conference on July 27 and 28.

The issue of state shareholding management became a focal point at yesterday's meeting with participants engaging in heated discussions on the controversial board election at Mega Financial Holding Co (兆豐金控) last Friday.

The finance ministry and other state agencies together won seven seats on the 15-member board of Mega Financial.

Prior to the board election, the government had been strongly criticized for failing to act to secure its control over Mega Financial. At the time, the government said it would not solicit proxy votes owing to budgetary limitations.

But Sean Chen (陳沖), chairman of Taiwan Cooperative Bank (合作金庫銀行), said yesterday that the ministry's Government Shareholding Management Unit should exert its rights as normal shareholders and act like its private counterparts to solicit proxy votes.

Wei Chi-lin (魏啟林), chairman of Paradigm Asset Management Co (華頓投信) and former chairman of the Lank Bank of Taiwan (土地銀行), echoed Chen's view, saying that the government could team up with private shareholders, who can absorb the cost of collecting proxy votes in exchange for one board seat from the government.

"As long as the Government Shareholding Management Unit makes its stand clear, businesses will strive to cooperate with the government," he said.

People First Party Legislator Christina Liu (劉憶如) likened the solicitation of proxy votes to the Taipei City mayoral election, in which whoever is interested in becoming a candidate must make his or her intention widely and firmly known.