Taiwan Financial Holdings Co (TFH, 臺灣金控), the nation’s largest financial services holding company, will delay its plan to sell shares to after next year after lawmakers opposed selling stock in state-owned companies.
“We won’t be able to do it next year so we are aiming for the year after,” chairwoman Susan Chang (張秀蓮) told reporters yesterday.
Her remark came after Premier Wu Den-yih (吳敦義) said last week that the government would not sell its shares in Taiwan Financial Holding to defray huge public revenue shortfalls unless there is a necessity.
“We are not so stupid as to sell the cash cow,” Wu said during a question-and-answer session in the Legislative Yuan on Friday, a day after the Cabinet scrapped a plan to increase revenues by selling a stake in the company, mainly because of strong public opposition.
The Cabinet had planned to sell its shares in Taiwan Financial Holdings to generate an estimated NT$23.7 billion (US$732 million) in extra revenues, but has now ditched the plan, Wu said, adding that it would be better to keep the company running and maintain its revenue stream.
For the time being, borrowing is the best option to address financial issues, the premier said on Friday, adding that Taiwan’s national debt would break the NT$14 trillion mark next year, equal to NT$610,000 in debt per capita.
Taipei-based Taiwan Financial, which includes a securities brokerage unit and a life insurance unit of the Bank of Taiwan (臺灣銀行), was formed on Jan. 1 last year as part of the government’s promotion of mergers and acquisitions.
Taiwan Financial had planned to sell shares “sometime next year,” Finance Minister Lee Sush-der (李述德) said in July. The company plans to sell a stake in itself of as much as 40 percent through an initial public offering, Chang said in May.
The government’s statistics bureau removed NT$23.7 billion in projected income in its 2010 budget plan from a Taiwan Financial share sale in a revision this month.
It marked the second time in the past two months that the government had scrapped a plan to sell shares in state-owned enterprises.
In a policy reversal last month, the Ministry of Finance ditched a plan to sell shares in state-run Land Bank of Taiwan (土地銀行) to raise funds for post-Typhoon Morakot relief and reconstruction. The government had aimed to raise at least NT$39.6 billion from the share sale to fund disaster relief efforts.
The government also plans to sell shares in Taiwan Tobacco & Liquor Corp (台灣菸酒公司) and Chunghwa Telecom Co (中華電信) to raise funds for the reconstruction work.