New team to take over China Development

Government-appointed Chen Mu-tsai (陳木在) yesterday teamed up with Angelo Koo (辜仲瑩), president of KGI Securities Co, to officially take over the helm of China Development Financial Holding Corp.

Chen, 58, is chairman of state-owned Bank of Taiwan. The government owns about 5.9 percent of China Development through Bank of Taiwan and International Commercial Bank of China.

"Seven standing committee members were elected to approve the nominations of Chen as the financial-service company's chairman and Koo as the president" at yesterday's 21-member board meeting, KGI chief financial officer Sherie Chiu (邱德馨) told reporters yesterday after the meeting.

Koo, 39, will double as head of the financial-service company's subsidiary, China Development Industrial Bank, Chiu said. KGI and other Koo affiliates spent NT$10 billion buying a 6.2 percent stake in China Development.

The industrial bank's incumbent 53-year-old vice president Jeffrey Suen (孫致中) will be promoted to president, Chiu added.

As the biggest winner in the boardroom war, Koo, the second son of Chinatrust Financial Holding Co chairman Jeffrey Koo (辜濂松), yesterday thanked the finance ministry and board members for their support but made no other comment.

Shares of China Development rose NT$0.7, or 3.5 percent, to close at NT$20.5 on the TAIEX, as investors appeared to respond positively to the new leadership team, with nearly NT$4.8 billion worth of shares changing hands.

"The company's board fracas has finally come to an end, which is positive news that will help boost investors' confidence to buy China Development shares," said George Wu (吳裕良), an analyst with Primasia Securities Co in Taipei.

But the company still faces challenges since its share price lags its competitors, he said.

In early March, China Development board member David Chen (陳鑫), chief executive officer at Chinatrust Venture Capital Corp, said that Koo's management team at China Development was aiming for a 15 percent return on equity this year.

With a total of NT$90 billion in domestic and overseas re-investments, China Development made NT$15 billion in annual capital gains, which David Chen said was under-performing.

Outgoing chairwoman Diana Chen (陳敏薰) who failed in her bid to take a standing committee seat, has begun packing up and, with outgoing president Chao Yuan-chi (趙元旗), will hand over the reins to the new management leadership at a handover ceremony tomorrow morning.

Diana Chen may return to her previous post at the family-run textile company Lilontex.

As expected, the finance ministry and KGI each secured three of the seven standing committee seats while the remaining seat went to private shareholder-board member Yeh Kuo-yi, (葉國一), chairman of the computer-maker Inventec Corp.

A management reshuffle is now likely, since Koo has further consolidated his grip at China Development with a controlling stake of nearly 10 percent.

No decision, however, was made yesterday regarding the fate of industrial bank chairman Benny Hu (胡定吾), who had thrown his support behind defeated Diana Chen.