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EVA Air to remain stable after chairman's ousting: analysts

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EVA Air to remain stable after chairman's ousting: analysts

Market analysts on Saturday said the operation of one of Taiwan's biggest international carriers, EVA Airways (長榮航空), will remain stable despite the surprise ousting on Friday of its chairman by his half brothers in the latest twist to a family succession war involving one of the island's biggest conglomerates.

Following the sudden mutiny at EVA Airways, the three sons by the first wife of the Evergreen Group's (長榮集團) late founder Chang Yung-fa (張榮發) now have control of the group's shipping and airline businesses, the crown jewels of the company.

Lin Pao-shui (林寶水), a veteran in Evergreen Group for 40 years, succeeded the ousted Chang Kuo-wei (張國煒), son of the late Chang's second wife, to take the position immediately. Before taking the EVA Air new position, Lin was the chairman of Evergreen Steel Corp. (長榮鋼鐵). Lin started working for Evergreen Group in 1976, was promoted to the president of EVA Air in 2004 and served as the carrier's chairman between 2005 and 2011.

Neih Kuo-wei (聶國維), a spokesman of EVA Air, was also replaced by Ke Chin-cheng (柯金成) in the board meeting. Nieh, who has been working for Evergreen Group for about 40 years, resigned as spokesman of Evergreen Group on Feb. 25, but soon took the position as spokesman at EVA Air before Friday's removal.

Analysts said the new chairman Lin and new spokesman Ke are both professionals in the airline business, and since they have been working in the industry for a long time, there is no need to worry about EVA Air's operations after the management reshuffle.

The three sons by the late Chang's first wife -- Chang Kuo-hua (張國華), Chang Kuo-ming (張國明) and Chang Kuo-cheng (張國政) -- held the special board meeting on Friday afternoon to oust Chang Kuo-wei (張國煒), their younger brother by the late Chang's second wife, from the chairmanship of the carrier.

The infighting surfaced after the second wife's son announced on Feb. 18 his own promotion to the position of Evergreen Group chairman, citing a will left by his father. However, his elder brothers refused to recognize Chang Kuo-wei's promotion and instead abolished the position of group chairman on Feb. 22, followed by the coup on Friday.

EVA Air and Evergreen Marine Corp. (長榮海運) are the best known flagship businesses of the Evergreen Group, a transportation conglomerate in Taiwan.

Following the ousting of the younger Chang, a qualified pilot who flew an EVA Air flight from Taipei to Singapore on Friday, Chang was barred from flying a plane back to Taipei Saturday afternoon as previously scheduled. The airline said it was for the sake of safety.

The younger Chang said that he was informed of the special board meeting just two hours before it started.

While he has claimed that the procedure of the special board meeting was illegal, the Taiwan Stock Exchange (TWSE) said that although Taiwan's Company Act said that a board meeting announcement should be made at least seven days before the meeting starts, but in case of an urgent event happening, the meeting is allowed to be held without a seven-day notice.

The TWSE said that so far, EVA Air's information disclosure about the board meeting and the decision of the meeting had no legal flaws. But the exchange said that the younger Chang could argue in court the definition of an urgent event cited by the carrier. The TWSE said that the information disclosure about the board meeting was swift and without flaws.

After the younger Chang publicized his father's will and announced his assumption of the Evergreen Group's chairmanship in February, the market had speculated that he would take charge of the group's airlines business, while his elder brothers would continue to supervise the shipping operations.

But the Friday board meeting resulted in a coup to oust the younger Chang. Lawyers and accountants in Taipei said that since the younger Chang does not hold a larger stake in EVA Air than his brothers, it will not be easy for him to reverse the situation and take back the chairman position, although he can seek support from foreign institutional investors and other major shareholders.

According to the local media report, the younger Chang holds an 11.45 percent stake in EVA Air through an investment company incorporated in the British Virgin Island, but his brothers by the late Chang's first wife control a 28.78 percent stake in the international carrier. The TWSE data showed that foreign institutional investors owned a 26.39 percent stake in EVA Air.

(By Wang Shu-fen, Chang Chun-mao, Tsai Yi-chu and Frances Huang)
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