Labor union challenges are unlikely to derail Taishin Financial Holding Co's (
Taishin Financial is Chang Hwa's largest shareholder with a 25 percent stake and eight of 15 board seats, while the government controls about 18 percent of holdings and nominates five board members.
"Taishin Financial may be in a bit of a rush but things can be brought under control with the government's agreement," said Chu Yu-chun (朱玉君), an analyst who tracks the nation's financial sector at SinoPac Securities Corp (永豐金證券).
Opposition from Chang Hwa's labor union, possibly in the form of strikes, may cause a hiccup in the course of the takeover but is not expected to ruin the deal, Chu said.
Chang Hwa President Chen Chen-chao (
Chang Hwa Bank Industrial Union has threatened to take a hardline stance against the management change.
Tsao Ping-kun (
Tsao said the union wanted a successor to come from inside the company, rather than a rival financial institution, adding that it would stage protests against the Ministry of Finance, which handles state holdings, for ignoring its duty and leaning towards private financial conglomerates.
Despite the union's threats, another market watcher remained positive about Taishin Financial's move.
"The approach may be rough but it needs to be done," said Shirley Yang (
Controlling the presidency of Chang Hwa would give Taishin Financial access to the bank's daily operations and clients, paving the way to eventual takeover, she said.
Yang said the financial group may want to complete the deal, which was struck last year, by the end of next year before a possible transfer of power in the 2008 presidential election.
Julius Chen's appointment is to be discussed at Chang Hwa's board meeting next Friday, postponed from next Wednesday in order to include the issue on the agenda required legally to be affirmed seven days beforehand.
"Julius Chen's appointment could unite Taishin Financial and Chang Hwa," an official at Taishin Financial, the nation's second-biggest financial group, said on condition of anonymity.
Taishin Financial has obtained the government's support for the personnel change and will continue to communicate with the union to solicit their support, the official said.
"This is not a zero-sum game. As a stakeholder, Taishin Financial will pursue the maximum interests for the bank," he added.
Julius Chen will no longer serve as president of Taishin Financial, the official said. Yet, he declined to confirm if Greg Gibb, the company's current chief operation officer, would take over the post as speculated.