Government-backed candidates and their allies yesterday won a majority of seats on state-run Chang Hwa Bank’s (彰化銀行) board, despite a High Court ruling that required the Ministry of Finance to help Taishin Financial Holding Co (台新金控) gain management rights in compliance with a 2005 agreement.
Taishin Financial expressed no surprise at the election result, which it attributed to the ministry’s intervention, and said the result undermined the government’s credibility.
The ministry welcomed the support of shareholders, saying it would continue to make sure the government’s stakes in companies would work to best protect the interests of all shareholders.
Photo: Lu Kuan-cheng, Taipei Times
It is now up to the Supreme Court to decide if the ministry remains obligated by a 2005 contract to yield management rights in Chang Hwa Bank to Taishin Financial, the largest single shareholder with a 22.5 percent stake.
The ministry had said the contract was valid only for the duration of the special shares Taishin Financial purchased in the state lender, but now argues that there was never any agreement.
All major policies that concern state-run financial institutions are subject to legislative oversight, but legislators never reviewed any agreement that asked the ministry to support Taishin Financial during Chang Hwa Bank board elections, Deputy Minister of Finance Su Jain-rong (蘇建榮) said on Monday after filing an appeal to contest the Taiwan High Court’s ruling last month in favor of Taishin Financial.
With the litigation ongoing, the parties involved did not need to allow the court’s ruling to affect the board election, National Treasury Administration Director-General Frank Juan (阮清華) said.
The court asked the ministry to help Taishin Financial win majority control of the state lender’s board unless either side sold its stake.
Government-backed candidates won three of six director seats and two of three independent director seats, Chang Hwa Bank announced.
Among them was Chang Hwa bank chairman Chang Ming-daw (張明道).
David Lee (李世聰), chairman of Lung Yen Life Service Corp (龍巖集團), the nation’s top funeral services operator, also won a seat after acquiring a sizeable stake.
Taishin Financial won two director seats and one independent director seat, not enough to reclaim the management rights from the ministry or dominate the lender’s boardroom.
“We did not really lose because we won the same number of seats this time as three years ago,” Taishin Financial said in a statement.
The ministry was not the winner because its intervention ran counter to the 2005 agreement, disregarded the Taiwan High Court ruling and had bankrupted the government’s credibility, it said.
“We are not surprised at the result because every time the government intervenes, it wins. It is a nightmare for all listed companies,” Taishin Financial said.
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