A quiet but consequential drama played out in Taipei's financial district last Friday, when government-aligned shareholders secured a majority of board seats at National Bills Finance Holdings (國票金控) and installed their preferred candidate as chairman. The government now controls, in all but formal legal classification, a company it once privatized.
Viewed as a response to a specific governance crisis, the intervention is understandable. Viewed as industrial and national policy, it is misguided — and a step in exactly the wrong direction. The Ministry of Finance now owns a problem it did not need to create. The question is what it does next.
How The Government Regained Control
At last Friday's shareholder meeting and board election, the government-backed bloc secured 8 of 15 board seats — a working majority. The board then confirmed Chang Chao-shun (張兆順) as chairman. For at least the next three years, National Bills Finance is, in practical terms, a quasi-state-owned enterprise.
Technically, an enterprise is classified as state-owned only when government shareholding exceeds 50 percent. But Taiwan has long maintained a parallel category: companies where the state holds far less — sometimes only 10 or 20 percent — yet exercises effective operational control through board appointments managed by the Ministry of Finance. The so-called "eight major banks," alongside Chunghwa Telecom, China Steel, Taiwan High Speed Rail, China Airlines, and Yang Ming Marine Transport, all operate under this arrangement.
National Bills Finance now joins that list — but its case is distinct. It is among the very few enterprises in Taiwan to be effectively re-nationalized years after privatization. Unlike the earlier Chang Hwa Bank dispute, where the government already held roughly 20 percent, here the state started from below 10 percent, having sat out successive board elections entirely, before deliberately building its stake above 20 percent and moving to seize control.
Why The Government Intervened — And Why The Method Is Wrong
The trigger was structural. National Bills Finance's major shareholder families each hold roughly 10 percent of the company, leaving no single party with dominant control. In principle, dispersed ownership of this kind can be managed through cooperative governance. At National Bills Finance, it produced years of internal conflict and steadily deteriorating board oversight. After watching from the sidelines, the government finally stepped in.
The Ministry of Finance's intention — to end the disorder and restore proper governance — is legitimate and deserves acknowledgment. The method is not. Re-nationalizing a listed company is the wrong instrument for correcting governance failures. The correct first responders were the Securities and Futures Bureau and the stock exchange. For a licensed financial institution, the Financial Supervisory Commission (FSC) bears direct regulatory responsibility.
National Bills Finance's governance problems were not new. The FSC was conspicuously absent while the situation deteriorated over years. That the Ministry of Finance ultimately had to step in and effectively reverse a privatization is, at minimum, a regulatory failure — and that failure deserves scrutiny in its own right.
There is also a personnel question. The incoming chairman is nearly 80 years old. It prompts a genuine question: is the ruling party's bench of qualified financial professionals genuinely that thin?
The Broader Risk: When The State Advances, The Economy Retreats
The case against arbitrarily re-nationalizing private enterprises is not complicated. Private firms consistently outperform state-owned ones in agility, efficiency, and operational results. At the macro level, the pattern of "state advancing as the private sector retreats" — a phrase closely associated with China's economic model and widely treated as a warning sign — is precisely what Taiwan should be moving away from, not toward. This is not the 1990s, when privatization was the global consensus; but the underlying logic of that era, that markets allocate capital better than ministries, has not changed.
Taiwan should want fewer episodes like this, not more.
Holding On Would Be The Worst Outcome
Now that the Ministry of Finance has taken ownership of this problem, it needs a strategy. Simply maintaining the status quo is the worst available option. If the government does nothing beyond holding its position, it will find itself politically trapped: every three years, it faces another boardroom battle. If it steps back, it will be accused of squandering national assets or handing a windfall to private interests.
The trap is real — but it is also self-inflicted. There is no genuine policy rationale for holding National Bills Finance indefinitely. The company's core business is money-market instruments — bills finance — a sector with no strategic significance and no critical chokepoint function in Taiwan's financial system. By any measure — assets, market capitalization, systemic importance — it is not remotely comparable to Taiwan's large private financial groups, and it does not belong in the same conversation as the eight major state banks.
The Logical Exit: Engineer A Public-To-Public Merger
The most rational strategy is a two-phase approach. In the short term, the government should use its newly secured control to restore governance standards and stabilize operations. Over the medium to long term, the goal should be to make National Bills Finance disappear — resolving the problem permanently by engineering its absorption into another financial holding group.
Given the political and social complications of a sale to a private buyer, the acquiring institution should be drawn from the state-owned financial holding companies with the appropriate scale and mandate. That makes this, in one respect, an opportunity: National Bills Finance could become the occasion for a concrete step toward the long-discussed but rarely executed goal of public-to-public consolidation in Taiwan's financial sector.
The Ministry of Finance did not need to take on this burden. Having done so, the least bad outcome is to use it strategically — and then to be done with it. （Related： Taiwan Is Cashing In on the Past. Who Plants for the Future? ｜ Latest ）
