Fri, Jun 13, 2008 - Page 12 News List

Ministry vows to fight Taishin

BATTLE OF THE BOARDThe finance ministry said it instructed its people to vote against Taishin’s proposal to amend Chang Hwa Bank’s charter and reduce its board

By Crystal Hsu  /  STAFF REPORTER

The Ministry of Finance said yesterday it would fight hard to protect the public interest and vote against Taishin Financial Holdings Co’s (台新金控) move to shrink or oust the government’s presence in Chang Hwa Commercial Bank (彰化銀行).

Chang Hwa’s board is scheduled to discuss whether to downsize the number of directors today. Taishin Financial controls a 22.5 percent stake in the former state-run bank, while the ministry and government funds hold about 20 percent.

PROPOSAL

Su Ler-ming (蘇樂明), director-general of the ministry’s National Treasury Agency, told reporters he had informed all government representatives to vote against the proposal to amend Chang Hwa Bank’s charter and cut the number of board directors and supervisors.

The proposed amendment seeks to reduce the number of directors at Chang Hwa Bank from 15 to nine and its standing board directors from five to three, Su said.

The bank’s supervisors will also be reduced from five to three if the proposal was passed, Su said.

The planned revision is aimed at ousting the government’s presence from Chang Hwa Bank’s board, said Su, a board member himself.

The government controls five seats in the bank’s board, or four directors and one supervisor, whereas Taishin Financial controls eight seats.

Su said the government could win three seats, while Taishin Financial could secure six seats on the board, granting the financial holding company a larger presence in Chang Hwa Bank if the proposed reform is approved at the shareholders’ meeting today.

CORPORATE LAW

Su said he and other government representatives would seek to protect the government’s interests in line with corporate rules, meaning there is little the ministry can do if Taishin Financial successfully moves to shrink the size of Chang Hwa Bank’s board.

Su said his stance on the matter has the blessing of the newly installed Minister of Finance Lee Sush-der (李述德).

While Taishin Financial may be able to cut the number of board directors, it is still unclear whether it could completely rid the bank of government representatives.

A market analyst said on condition of anonymity that attempts on the part of Taishin to remove the government from the board could pose a legal problem.

He said that corporate law bars shareholders from voting on matters that harm the rights of other shareholders.

No Taishin Financial official was available for comment last night.

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