Chang Hwa headhunts new president

Chang Hwa Bank (彰化銀行) announced yesterday that it would be hiring Julius Chen (陳淮舟), president of rival Taishin Financial Holding Co (台新金控), to be bank president.

Chang Hwa's board approved the appointment in a regular meeting yesterday, the nation's seventh-biggest lender by assets said in a filing to the Taiwan Stock Exchange (TSE) yesterday.

Julius Chen will replace Chen Chen-chao (陳辰昭), who offered his resignation last week. Chen's one-year contract expires at the end of this month.

Julius Chen will be on board as soon as the Financial Supervisory Commission's gives its approval -- possibly early next month -- Chang Hwa spokesman Miles Chang (張明文) said in a telephone interview.

Taishin Financial has a 25.5 percent stake and eight of 15 board members in Chang Hwa, while the government holds an 18 percent stake and four board seats.

However, the management change, which many believe will help accelerate Taishin Financial's acquisition of Chang Hwa, provoked strong opposition from the state-controlled bank's labor union.

Chang Hwa Bank Industrial Union staged a protest with hundreds of employees early yesterday morning prior to the board meeting to voice its opposition to the management reshuffle.

The union called on the Ministry of Finance and the commission to investigate the nomination and appointment procedures.

"We strongly question the legitimacy of the appointment in yesterday's board meeting with the suspended chairman Chang Po-shin (張伯欣) and a total of seven board directors, including four government representatives, absent," union president Tsao Ping-kun (曹炳坤) said.

The bank's Constitution gives the power to nominate presidential candidates to the chairman's post, Tsao said.

Julius Chen's nomination was made by Wang Wen-you (王文猶), sitting in for chairman Henry Kao (高志尚) who is currently on leave. This does not conform to regulations, Tsao said.

Since both Kao and Wang are board directors representing Taishin Financial, the union said that the appropriate thing to do would be to wait until Chang resumes his post on Nov. 27 when his six-month suspension expires.

The union also questioned the the absence of four state-appointed board directors at the meeting, and said that that it suspected the finance ministry was in collusion with Taishin. This was a deliberate act of neglect in failing to stand up for state assets and minor shareholders' rights and interests, Tsao said.

Still, the labor union was tight-lipped about any strike action, saying that industrial action was a last resort.

In response, Deputy Minister of Finance Liu Teng-cheng (劉燈城) explained that the absence of the four government-appointed directors from the Chang Hwa board meeting yesterday was merely "coincidence," not a trick as some had speculated.

Liu said directors Chang Ching-hsi (張清溪) and Kuei Hsian-nong (桂先農) had both applied for leave in advance and commissioned Lin Shih-ming (林世銘) and Johnson Chuang (莊勝榮), another two directors appointed by the finance ministry, to attend the board meeting on their behalf.

However, Lin called in sick and Zhuang, a lawyer, was required to go to court, Liu said.

"Although all four government directors were absent, it did not affect the meeting as the government had already given its approval to the bank's personnel change, allowing Julius Chen to serve as president," the official said.