Ministry to spoil Koo bid

Lin Cheng-yi (林誠一), the chairman of the state-controlled China Development Financial Holding Co (中華開發金控), is expected to stay on as government-appointed representative during the firm's general meeting on Friday, the Ministry of Finance said yesterday.

"Lin will be listed as one of the government-appointed board directors and his shareholding will support the government," said Tsai Ching-nain (蔡慶年), director-general of the ministry's National Treasury Agency, at a press briefing.

Private shareholders -- including China Development's former chairwoman Diana Chen (陳敏薰), Acer Inc and Yuen Foong Yu Group (永豐餘) -- have made it clear that they would support the government against the Koo family, led by China Development president Angelo Koo (辜仲瑩).

Yeh Kuo-yi (葉國一), chairman of computer-maker Inventec Corp (英業達), who formerly sided with the Koo family, also handed his proxy votes to Lin, Tsai said.

Yeh's shareholding is close to 1 percent.

The ministry said that, following a month of effort soliciting the proxy votes, it has secured 855 million shares, which accounts for 8.1 percent. Added to a stock holding of 11.16 percent held by other state-run banks, the government could now secure around 19.26 percent of shares, the ministry added.

The Koo family has boosted its shareholding to more than 16 percent, according to statistics released on April 17, the last day for share transfers. It was unclear how many proxy votes the family had gained.

The ministry has not negotiated with Koo on board seat arrangements, but Tsai said he hoped the Koo family could also make public the proxy vote counts it had secured to ensure that the general meeting proceeds smoothly on Friday.

Minister of Finance Ho Chih-chin (何志欽) said early last month that the government would do its best to prevent the Koo family from taking a majority in the nation's 12th-largest financial services provider in the light of their controversial corporate governance record.

Hua Nan Financial Holdings Co (華南金控), another state-controlled institution, is also scheduled to hold a board election on Friday.

The government controls 33.88 percent of the company. Major private shareholders led by chairman Lin Ming-cheng (林明成) have a holding of 29.7 percent.

Added to the proxy votes that the ministry has obtained, the government could control nearly 40 percent of shares, Tsai said.