Taipei, Aug. 26, 2008 (CENS)--Under the instruction of the government, Chunghwa Telecom may become the largest shareholder of Taiwan Financial Center Corp. (TFCC) , owner (TFCC) of Taipei 101, and take over its management, in order to turn around the operation of the building, which has been mired in deep red ink for years.

Chunghwa Telecom reportedly will acquire the 15.11% stake owned by the RTC (Resolution Trust) fund in TFCC, which will be added to its existing 11.75% stake, thereby boosting its stake to 26.86%, the largest, compared with 25% held by pan Chinatrust Group and 19.5% by China Development Industrial Bank.

In addition, the board of director of Chunghwa Telecom is expected to approve at its meeting today (Aug. 26) the subscription to the capital increment of TFCC at a proportion corresponding to its stake in the company. The RTC fund has decided to skip the capital increment, while other major shareholders have yet to express their stance toward the program.

The capital increment follows the capital reduction of TFCC recently, which slashed the company`s paid-in capital to NT$14.7 billion, down from original NT$24.5 billion, to write off its huge red ink. The NT$2.7 billion to be raised from the capital increment will be used as reserved fund by TFCC.

Chunghwa Telecom has listed loss amounting to one fourth of its original NT$2.88 billion investment in TFCC, but the company stands to solicit related telecom businesses from the tenants of Taipei 101.

The development has put the position of TFCC chairman Diana Chen, already five years in office, at risk. Despite the occupation rate of Taipei 101 has reached 80%, TFCC is still in red, as the sale performance per ping (one ping equals 36 square feet) of the shopping center of the building remains low.

(by Philip Liu)