TAIPEI: Public stakeholders seized nine of 15 seats on the board of directors and supervisors of the troubled Taiwan High-Speed Rail Corp (THSRC) yesterday, allowing the government to take control of the debt-ridden company.
Earlier, THSRC called a provisional meeting of its shareholders, in which the board's seats went up for election despite the fact that the tenure of the incumbent board directors will not expire until August 2010.
The election was called because the company has been in financial dire straits, which prompted the government to intervene in its management. The election was aimed at justifying the government's right to help the company improve its shaky financial structure, THSRC officials said.
The new board is made up of 15 directors and two supervisors, including three independent directors. Of the total of 17 seats on the board, 10 seats were filled by incumbents.
According to the election results, the government-owned China Aviation Development Foundation that runs Taiwan's largest air carrier, China Airlines, kept its seat on the board, as did the government-run Taiwan Sugar Corp and the CTCI Foundation.
The CTCI Foundation, formerly known as China Technical Consultants, Inc, is a government-funded organization dedicated to developing technological talents for Taiwan, to facilitate Taiwan's economic development and assist Taiwan's manufacturing industries in improving their productivity.
New faces on the board include the Kaohsiung-based China Steel Corp, in which the government has a stake, and the Executive Yuan-run National Development Fund, which gained two seats.
The three independent directors are former financial affairs chief, Lin Cheng-kuo, former Number 2 man of the transportation and communications affairs authorities George Chen and Waterland Financial Holdings Chairman Victor Liu.
Among the six new directors that represent private funds, THSRC's five original principal shareholders - Continental Engineering Corp, Pacific Electric Wire & Cable, Teco Electric and Machinery, the Evergreen Group and Fubon Financial Holding Co - all managed to retain their seats. The Tung Ho Steel Enterprise won the sixth seat as a new board member.
The High Speed Rail connects northern Taiwan with southern Taiwan, allowing travelers to travel between Taipei in the north to the country's second largest city Kaohsiung in the south within two hours.
THSRC, a private company that built the 345-kilometer high-speed railway and operated the line under a build-operate-transfer (BOT) contract with the government, has been losing money since the railway began operating in January 2007.
(HK Edition 11/11/2009 page2)