After having shut off contact with the outside world for more than a week, the outgoing chairman of China Development Financial Holding Co (中華開發金控), Chen Mu-tsai (陳木在), yesterday finally made an appearance to answer questions raised by legislators regarding the dispute over his chairmanship.
But Chen's presence at the legislature only served to expose heightened tensions between him and the Ministry of Finance, which in 2004 had appointed him as chairman of the nation's sixth-largest financial service provider by market value.
Just a day after one of his possible successors decided to turn down the government's job offer citing unbearable pressure, Chen told lawmakers that China Development Financial will convene a board meeting tomorrow as required by the ministry to elect his successor.
"I don't have to call the meeting, but since the ministry demands it, [we'll do it]," Chen said.
The controversy surrounding the company took another surprising twist yesterday morning in the legislature's Finance Committee, where the deepening animosity between the finance ministry and Chen became apparent.
The committee arranged yesterday's meeting to review the ministry's management of government-controlled financial institutions. However, Chen's absence raised the ire of lawmakers across the political spectrum.
While some lawmakers accused Chen of disrespecting the legislature, Minister of Finance Joseph Lyu (呂桔誠) reiterated that he did not know where Chen was, as the ministry had lost contact with him over the past few days.
However, after more than two hours it was revealed that Chen had been seen in the legislature being interviewed by several journalists. Infuriated Chinese Nationalist Party (KMT) Legislator Fei Hung-tai (費鴻泰) demanded that the ministry immediately relieve Chen of his status as a government-appointed representative.
Just then, to everyone's surprise, Chen stepped into the meeting room and was greeted by waves of camera flashes.
Chen explained that he had arrived at the legislature after 10am and had made two phone calls to the minister's secretary, who was inside the meeting room but had not informed Lyu about his arrival.
"I was waiting for his secretary to let me know when to come in, as I have asked for leave today and did not know whether my attendance would cause trouble for the minister," Chen said.
Lyu replied that it was Chen's responsibility to attend the meeting as requested by the committee, adding that Chen should not pass the buck to his secretary.
The incident showed the wide gap of misunderstandings between the ministry and Chen, who repeatedly said he has done nothing wrong and that the ministry should evaluate the credentials of China Development Financial's independent directors and supervisors.
The ministry demanded Chen's resignation on March 20 after China Development Financial launched a hostile takeover of Taiwan International Securities Corp (
Chen called a press conference on March 22 to defend his reputation and deny any wrongdoing in the merger deal.
As the management controversy has dragged on for weeks with both sides giving their own version of events, the company's share prices have continued to drop, shedding 0.8 percent to NT$11.65 (US$0.36) on the TAIEX yesterday.
In addition, the ministry has not announced its new candidate for the post after Lin Tzong-yeong (林宗勇), former president of Mega Financial Holding Co (兆豐金控), unexpectedly said on Tuesday night that he would turn down the government's offer to replace Chen.
Chen was appointed to take the helm of China Development Financial in April 2004 to counterbalance Angelo Koo (
The choice of the pair was appraised by both the government and private sector as a good example for running a financial institution when both sides enjoy equal power within the boardroom.
Lin had gained firm support from Lyu and Premier Su Tseng-chang (
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