The Ministry of Finance is likely to keep its current seats on the Chang Hwa Commercial Bank (彰化銀行) board following elections at the end of the year as the ministry looks for ways to resolve an ongoing controversy over the state lender’s status, a ministry official said yesterday.
The controversy centers on the fact that the state lender has been 22 percent owned by a private financial holding company, Taishin Financial Holding Co (台新金控), since 2005. The ministry hopes to have at least four seats on the board of Chang Hwa, one of the nation’s leading lenders, with the power to designate its president, the official said.
Minister of Finance Lee Sush-der (李述德) first mentioned the ministry’s intention to end Chang Hwa’s status as a subsidiary of Taishin Financial during an interview with the Chinese-language Economic Daily News on Wednesday.
Deputy Minister of Finance William Tseng (曾銘宗) yesterday confirmed that the ministry is considering an “appropriate method” to resolve Chang Hwa’s ownership issue.
“First of all, as out primary goal we will seek to maintain our current number of seats on the bank’s board during the election on Nov. 25. We will also search for better ways to deal with its ownership and help the bank’s long-term development,” Tseng told a press briefing.
The ministry will come up with the best timing and method possible to solve Chang Hwa’s ownership issue, Tseng said.
However, Tseng declined to speculate on a detailed schedule or possible measures, and he did not comment on whether other state-run banks were seeking to increase their holdings in Chang Hwa, saying “those are decisions made by the individual bank’s management team.”
Bingo Lee (李並光), acting spokesman at Taishin Financial, said the company agreed with the ministry on the need for communication to find a solution to the problem.
“We are receptive to measures that best serve the interests of Taishin’s shareholders,” Lee said by telephone yesterday.
Taishin Financial secured NT$1.4 billion (US$47.75 million) in preferred shares of Chang Hwa during the government’s second stage financial reform, acquiring a 22 percent stake in the state bank through a private placement in June 2005.
However, the case aroused negative public sentiment toward big business conglomerates after cases of corruption were uncovered.
Currently, Taishin Financial holds a 22.55 percent stake in Chang Hwa, while the ministry holds 20 percent, data showed.
Tseng said the ministry is following a plan to privatize government-owned enterprises, adding that Chang Hwa is an isolated case.
“However, what we are doing for Chang Hwa meets the public’s expectations,” Tseng said.
Additional reporting by Crystal Hsu
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