Government-appointed candidates yesterday retained majority control of state-run Chang Hwa Bank’s (CHB, 彰化銀行) board of directors, while Taishin Financial Holding Co (台新金控) won four seats, including all three independent directors’ seats.
CHB board elections have been contentious for the Ministry of Finance and Taishin since 2005, when Taishin acquired a 22.5 percent stake in the bank, with a written agreement from the ministry to help secure control of the lender.
The ministry has insisted it fulfilled its obligation from 2005 to 2013 and is not responsible for shareholders deciding to give government representatives majority control from 2014 onward.
Photo: Chen Mei-ing, Taipei Times
Both sides declared victory after the election and traded barbs over CHB’s financial performance.
The ministry said it is grateful that shareholders again rallied behind government representatives, who they said would seek to protect the interest of all shareholders.
“The election results suggest Taishin Financial would exit the board room as it failed to support its own legal representatives,” Deputy Minister of Finance Frank Juan (阮清華) told a news briefing yesterday afternoon.
That probably means that Taishin would cede all management affairs to government appointees, and it might be better this way, Juan said.
Taishin’s strategy to focus on independent directors’ seats fell in line with the ministry’s expectation, Juan said.
The ministry aimed to maintain majority control of the board room and achieved that goal, he added.
The deputy minister called on all directors to remain united and focus on the interests of CHB and its shareholders.
Earlier yesterday, CHB chairwoman Joanne Ling (凌忠嫄) said the retention of government directors signifies a victory for the ministry.
“With majority control of the board, government directors can continue to run CHB and help it grow stronger and more profitable,” Ling told reporters, even though the government retained the same number of seats, but Taishin gained one.
CHB has nine board seats, including three independent directors who are in charge of the auditing, remuneration and sustainability committees.
Taishin said it focused on independent directors’ seats to strengthen oversight of the bank, after seeing the lender’s proficiency weaken and lag behind other major state-run banks in the past few years.
The company said it was grateful and surprised that shareholders gave a board seat to one of its nominees.
“It is entirely up to government directors to improve CHB earnings now that Taishin Financial no longer has any legal representative director on the board, despite being the largest shareholder,” the conglomerate said in a statement.
Taishin urged newly elected board members to soon convene a meeting and elect a new chairperson to lead CHB.
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