Wed, Apr 07, 2004 - Page 1 News List

China Development team keeps everyone pleased

By Joyce Huang  /  STAFF REPORTER

Investors yesterday welcomed a proposed new management team for China Development Financial Holding Corp, with government officials and pundits saying that the arrangement signaled a balance of power within the company's shareholding structure.

After claiming the highest amount of board seats, the Ministry of Finance and KGI Securities Co yesterday jointly recommended Chen Mu-tsai (陳木在), chairman of the Bank of Taiwan and KGI president Angelo Koo (辜仲瑩) to serve as chairmen of the China Development Financial Holding Corp and its subsidiary China Development Industrial Bank respectively.

Minister of Finance Lin Chuan (林全) said yesterday that Chen Mu-tsai will be the most qualified candidate, designated by the ministry with one third of the board seats, to head China Development, if a majority of support is garnered at the company's reshuffled board meeting.

Lin made the remark after a breakfast meeting with the Taiwan Solidarity Union's (TSU) legislative caucus. He said that the ministry, KGI and Diana Chen's (陳敏薰) Lilontex Corp have each secured a sizable amount of board seats and votes at the company's board election on Monday, which may empower the three to negotiate or elect a new top management team for the next three-year term.

Both nominations, however, require a further endorsement from the company's new board, which Lilontex will be entitled to call for a vote before April 20 since it garnered the highest votes on Monday.

The government and KGI Securities each secured seven seats on China Development's newly elected 21-member board on Monday, while chairwoman Diana Chen and her family have four seats.

Hsu Chen-min (許振明), a professor of economics at National Taiwan University, said that Chen Mu-tsai, who also doubles as chairman of the Bankers Association of the ROC, is a senior banker with recognized experience.

Hsu also expressed confidence in Koo for his transition from securities firms to industrial banking businesses as a policy-maker.

But Chen Mu-tsai may face many challenges ahead since he's never headed any private banks, especially a "financial monster" that was formerly under the control of KMT treasurer Liu Tai-yin (劉泰英) and went through numerous internal infighting among its factions, Hsu said.

"Chen Mu-tsia should draw a clear line between his government-designated background and his professionalism while taking the helm of China Development," Hsu said.

"The nominations at least put an end to the company's power struggle for the time being, bringing stability, and easing investors' concerns," said George Wu (吳裕良), a research analyst with Primasia Securities Co.

Wu, however, expressed a less-than-optimistic view toward the new management reshuffle, saying that the government should gradually step out of China Development's management and ownership by releasing government-owned shares to the market and accelerating its privatization plan.

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