Sat, Jun 14, 2008 - Page 12 News List

Ministry of Finance opposes Chang Hwa board cut

By Joyce Huang and Crystal Hsu  /  STAFF REPORTERS

Su Le-ming (蘇樂明), the National Treasury Agency director-general and a government-appointed member of the Chang Hwa Bank board, voiced the Ministry of Finance’s opposition to cutting the number of board members at a shareholders meeting yesterday.

The bank’s board unilaterally passed a proposal to reduce the number of board seats by an 8-6 vote early last month. Citing Article 172 of the Company Law (公司法), stakeholder Taishin Finanial introduced the proposal in April to amend the bank’s charter and downsize its board, which it said would increase efficiency.

Su questioned the proposal’s legality, as Taishin Financial’s 22.5 percent stake in the bank had been granted with the condition that Taishin’s board members would have the right to vote but not the right to propose motions.

The ministry will “wait for a court decision,” he said, adding that the ministry would work to protect the government’s stake in the bank.

At an evening news conference, Su said the outcome of the shareholder’s meeting was regretful but not surprising.

Su said the development should not be taken lightly as Taishin Financial can force the government from its stake in the bank. The government will use all legal means necessary to retain its presence in Chang Hwa at the November board meeting, he said.

When the board is reshuffled in November, Su said the government should be able to win one-third of the board seats, as it had before the board’s membership was reduced. He declined to elaborate.

Su has said that Article 178 of the Company Law bans Taishin from putting forward any proposal that benefits itself at the expense of other shareholders.

But Kao Ching-yuan (高靜遠), deputy director-general of the Department of Commerce, said the board cut was not illegal and the department respected the decision made at the shareholders meeting.

ADDITIONAL REPORTING BY JERRY LIN

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