Thu, Jul 20, 2006 - Page 11 News List

Government is excluded from the board of CMPC

WHEELS WITHIN WHEELS There has been speculation that the Central Motion Picture Co's change to its board was designed to facilitate the sale of KMT assets


Liu Teng-cheng (劉燈城), director-general of the finance ministry's National Treasury Agency, said yesterday the ministry would protest on behalf of government shareholders over the ouster of their representatives from the Central Motion Picture Co (CMPC, 中央電影公司) board.

The ministry will also authorize the Bank of Taiwan (台灣銀行), which represents government shareholders at the film-making company, to sue CMPC.

The bank, which previously occupied two seats on the company's board, will decide when and how the lawsuit will be handled, Liu said. The government-owned Bank of Taiwan, Land Bank of Taiwan (土地銀行) and Farmer's Bank (農民銀行) together hold 16 percent of CMPC stocks.

In the past, the government held three director seats and one supervisor seat at CMPC, of a total of 16 director seats and three supervisor seats.

But the company's decision last week to cut the number of director seats to five and that of supervisor seats to one resulted in government shareholders losing all their representation on the CMPC's new board.

"We'll support the Bank of Taiwan to follow the law and claim their rights," Liu said, after news broke that CMPC had changed its board structure last week ahead of a planned sale of CMPC by the opposition Chinese Nationalist Party (KMT) to a private group. There has been speculation that CMPC's move to change its board structure is designed to facilitate the sell-off of the KMT's stolen assets.

Cabinet Spokesman Cheng Wen-tsang (鄭文燦) said yesterday that the CMPC board's decision to authorize its chairman to dispose of the company's assets has seriously damaged the rights of shareholders.

He further accused the CMPC of violating the Company Law (公司法) by deciding to buy up 3 million special shares held by Bank of Taiwan, and said that any such decision could only be made in a special shareholder meeting.

In addition, the 19 cinemas taken over by CMPC from the former Japanese colonial government are neither assets of CMPC nor the KMT, but are national property, and the government will reclaim them according to law, Cheng said.

Early this month, the Cabinet instructed the Ministry of Finance to ask the KMT to return the 19 cinemas. As most of these cinemas have already been sold, the Cabinet decided that the KMT should return a total amount of NT$3 billion (US$91 million).

According to local media reports, the Ministry of Finance had expected government shareholders to exert their influence on the CMPC board to block the sale of the remaining cinemas, but there is no way for them to do so now that they have no representation on the CMPC board.

CMPC chairman Alex Tsai (蔡正元), who is also a KMT legislator, yesterday denied that the change of the company's board structure had anything to do with the sale of KMT assets, claiming that CMPC had no affiliation to the KMT.

The company would continue to operate based on the principles of fairness and transparency, Tsai said.

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