Lawmakers put Hua Nan Financial Holdings on notice

The private management in state-controlled Hua Nan Financial Holdings Co (華南金控) must boost its shareholding to 33 percent before next year's board election to win the government's support, lawmakers said yesterday.

Currently, Hua Nan Financial chairman Lin Ming-cheng (林明成) and his team controls around 20 percent of the nation's fifth-largest financial services provider in terms of assets.

The government, which holds 33.88 percent, is the firm's biggest shareholder with 8 seats on its 15-member board, according to the Ministry of Finance.

As Hua Nan Financial is expected to have a board election in June, lawmakers serving on the legislature's Finance Committee yesterday passed a motion demanding that the government not support the current management if Lin and his team fail to increase their shareholding to surpass the government's.

Minister of Finance Ho Chih-chin (何志欽) stressed that the ministry would consider soliciting proxy votes or even cooperating with other private shareholders to secure a majority of the board seats.

A finance ministry official who refused to be named said as the independent director system will be introduced into banking institutions next year, Hua Nan Financial will have three independent directors on the board. The government is confident of remaining the biggest shareholder and obtain a minimum of seven seats out of the remaining 12 spots, the official said.

As for China Development Financial Holding Co (中華開發金控), the finance ministry reiterated its stance that the Koo family must increase its shareholding to 15 percent before the board election next year.

People First Party Legislator Christina Liu (劉憶如) questioned whether the Koo family's shareholding in the financial service provider is not completely financed by its own capital. She demanded that the ministry plug the loophole.

Ho reiterated that the government will not withdraw from China Development's board and will solicit proxy votes if the Koo family fails to raise its shareholding.

The government will secure the chairmanship in the next board election and whether Angelo Koo (辜仲瑩) can maintain his presidency depends on his team's stockholding, Deputy Minister of Finance Liu Teng-cheng (劉燈城) said.