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Fri, Dec 07, 2001 - Page 18 News List

Pundits praise China Life reshuffle

INSURANCE The leadership reshuffle, which included the appointment of Jeffrey Koo's son as chairman, and reassessment of assets is expected to boost shareholder confidence

By Joyce Huang  /  STAFF REPORTER , WITH BLOOMBERG

A leadership reshuffle within China Life Insurance Co (中國人壽) will have a positive impact on the insurer's future stock market performance, pundits said yesterday.

Previously controlled by Koo Chen-fu (辜振甫), China Life on Wednesday came under the control of Koo's nephew, business tycoon Jeffrey Koo (辜濂松).

"With support from Jeffrey Koo's Chinatrust Commercial Bank (中國信託商銀), the insurer's stock price is likely to climb ...," former president of Wealth Magazine (財訊) Hsieh Chin-ho (謝金河) said yesterday, adding that the insurer's reassessment of assets also helped boost shareholder confidence.

The firm's stock price yesterday rose NT$0.45, or 6.4 percent, to NT$7.50. The insurer estimates it stock is worth NT$52.12, according to written statement release by the company.

The firm's board meeting on Wednesday accepted the resignations of two top officials, Koo Chen-fu and his son Chester Koo (辜啟允), who cited health concerns. It appointed Jeffrey Koo's son Koo Chung-li (辜仲立) and Yen Ho-yuan (顏和永) as its chairman and president respectively -- a move to strengthen Jeffrey Koo's grip on power.

The appointment of Koo Chung-li, 34 -- Jeffrey Koo's third oldest son -- represents his father's willingness to take over the insurer's problems after its former president Chester Koo took on debts of more than NT$50 billion, Hsieh said.

Moreover, the 74-year-old Yen, who was the insurer's vice chairman and vice president for more than four years, will assist the younger Koo with his 18 years of experience with the Koo Group (和信集團).

Yen formerly served as chairman of Taiwan Fuji Xeros Corp (台灣全錄), also an arm of Koo Chen-fu's business.

Hsieh said that Jeffrey Koo, whose business in the financial sector is healthy and strong, is the only member of the Koo family -- one of Taiwan's richest families with business interests ranging from cement to communications -- who is capable of reviving the ailing insurer.

Since Jeffrey Koo has also placed his sons in key positions at Chinatrust and KGI Securities Co (中信證券), pundits said that the China Life reshuffle might signal plans to merge the insurer into a financial holding company that Chinatrust plans to set up -- speculation that the bank has denied.

"[The merger] is the main reason for the changes," said James Lin, who manages NT$ 1.2 billion (US $35 million) in stocks at Apollo Securities Investment Trust Co (阿波羅投信). "And from that perspective, it's positive for China Life."

Echoing Lin's view, Hsieh said that the leadership change at China Life showed that Koo Chen-fu planned to focus his business interests on the cement, cable television and communications sectors, while Jeffrey Koo would further expand his interests in the banking, securities and petrochemical industries.

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