Fri, May 12, 2017 - Page 12 News List

Minister speaks up for minority owners in Taishin bid to regain CHB control

By Crystal Hsu  /  Staff reporter

Minister of Finance Sheu Yu-jer (許虞哲) yesterday said that it would be unreasonable and unfair to minority shareholders should the Taiwan High Court rule in favor of Taishin Financial Holding Co (台新金控) in the management right dispute at state-run Chang Hwa Commercial Bank (CHB, 彰化銀行).

Sheu made the remarks one week before the high court is to announce its decision on whether the ministry is permanently obligated to help Taishin Financial win majority control of Chang Hwa Bank’s board as stipulated in a 2005 agreement.

Taishin Financial acquired a 22.5 percent stake in Chang Hwa Bank in 2005 with a written agreement from the ministry — the bank’s second-largest shareholder with about a 20 percent stake — to help secure majority control of the bank’s board and made it a subsidiary of the conglomerate.

“A permanent reading of the contract would ignore the rights of minority shareholders, who also have a right to decide the board’s lineup through their votes,” Sheu said.

Chang Hwa Bank is due to elect a new board on June 16.

Government-controlled stakes have nominated eight candidates for the nine-member board, suggesting a showdown ahead.

Hsu said similar contracts in different countries have limited and conditional binding effect on the parties involved, with their validity averaged at a decade, shorter than the agreement at issue.

The ministry said it had fulfilled the 2005 agreement by helping Taishin gain control of Chang Hwa Bank’s board from that year until 2014, when shareholders overwhelmingly rallied behind government-backed nominees.

Chang Hwa Bank’s performance in terms of earnings and corporate governance has improved in the past three years, Sheu said, adding that a loan fraud currently under investigation took place when Taishin Financial took charge of the state-run lender.

Sheu dismissed claims by Taishin Financial that it has ignored requests for a meeting.

“All we got are two letters from Taishin Financial demanding the ministry help it win majority control in Chang Hwa Bank. There was no mention of meetings,” he said.

The ministry has complied with a district court’s ruling not to obstruct Taishin’s efforts to regain management control, National Treasury Administration Director-General Frank Juan (阮清華) said.

Whether Taishin Financial can win over other shareholders is outside the responsibility of the ministry, Juan said.

The ministry will file an appeal if the High Court rules in favor of Taishin Financial, Juan said.

This story has been viewed 2519 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top