The dramatic infighting at China Development Financial Holding Corp (
China Development, Taiwan's fourth-largest financial holding company, is scheduled to hold a shareholders' meeting on April 5 to elect a new board.
A faction led by KGI Securities Co (中信證券), with a 6-percent stake the biggest shareholder in China Development, is expected to control over 80 percent of the company's shares at the shareholders' meeting. KGI has support from the government and from private shareholders including Yuen Foong Yu Group (永豐餘集團), Acer Inc, Inventec Corp (英業達), Nice Enterprise (耐斯企業) and others.
The Ministry of Finance has been negotiating with KGI on a plan for allocation of board seats. The government has been represented in these negotiations by the state-owned Bank of China (
The government, which owns a 5.86-percent stake in China Development, nominated 10 board candidates including Lee Sheng-yann (
KGI recommended eight individuals including KGI president Angelo Koo (
The right to choose the voting bloc's remaining three seats will go to Acer Inc, Yuen Foong Yu Group (
To the market's surprise, Benny Hu (
Hu, the top member of Chen's management team, has chosen to side with the government and KGI on the issue of the board reshuffle.
China Development Financial did not make public its list of candidates for the board.
"The list will not be announced by March 5," company spokeswoman Debbie Tung (董孝穎) said.
On Wednesday, Chen pulled out of a government-proposed deal aimed at resolving the row over the board election. She said that the government, KGI and her Lilontex Corp (理隆纖維) together own less than 30 percent of China Development's shares and have no right to decide the board's future makeup. She said she would not participate in a group effort to collect letters of proxy from shareholders.
Though Chen is still striving to obtain support from smaller shareholders including Rock Hsu (
The uproar over the governance of China Development emerged after the ministry held a meeting Sunday to intervene in the company's upcoming board vote. As a result of the meeting, Chen is expected to lose her position.
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