TAIPEI, Aug 16, 2000—(Reuters) Taiwan police armed with batons and shields scuffled briefly with disgruntled employees of state-owned Chunghwa Telecom on Wednesday as the company began the biggest initial public offering in the island’s history.
Beating gongs and drums and blowing horns, more than 5,000 Chunghwa Telecom employees marched through Taipei, clashing with police as they tried to rush the cabinet building.
The protesters fear privatization could mean lay-offs and pay cuts. Chunghwa, which began a four-day auction of its shares on Wednesday, is widely expected to streamline its 35,000-strong workforce to compete against foreign and domestic rivals.
Police formed human barriers and parked buses outside the cabinet building in central Taipei and pushed back protesters as they tried to scale the walls of the building compound.
No arrests or major injuries were reported.
The crowd dwindled to a few hundred after an afternoon downpour and then dispersed.
The protesters, mostly middle-aged, jammed cabinet office phone lines by simultaneously calling with their mobile phones.
Wearing blue vests and headbands around their caps, the protesters
chanted slogans demanding the resignation of Transport and
Communications Minister Yeh Chu-lan, who has come under fire for
accusing Chunghwa of being
Yeh has apologized, but the flag-waving protesters were
The communications minister should love us and not harm
us, said Yao Yu-pei, 45, who has worked with Chunghwa for 25 years
and traveled to Taipei from the central county of Nantou.
Another worker, Cheng Hui-mei, 35, from the eastern county of Taitung,
We became civil servants after taking tough government
examinations. But now it means nothing.
The workers’ union wants Chunghwa Telecom to promise not to cut salaries and to set retirement age at 65 after privatization.
Protect my working rights, protest banners read.
Chunghwa’s new chairman, Mao Chi-kuo, said he would seek to protect the rights of workers, but said the competitiveness of the company should not be hurt.
Mao, 51, the outgoing vice communications minister, was named chairman at the weekend to replace Steven Chen, 66, who resigned last week, citing his age.
Despite Wednesday’s protest and the abrupt change in leadership, analysts said they expected the August 16-19 auction to get a warm reception from investors.
Auction results, which would help form the underwriting price for Chunghwa’s October stock market debut, will be announced on August 25.
The level of interest in the auction of three percent of Chunghwa shares was unclear.
The union has complained the TWD 104 (USD 3.35) base price for the auction of 289 million shares was too high.
Under its privatization schedule, Chunghwa will sell 33 percent of its equity by the end of 2000—three percent by auction, 13 percent through an initial public offering, five percent through an issue to Chunghwa employees and 12 percent through American Depositary Receipts for foreign investors.
Chunghwa is scheduled to float a further 33 percent in 2001.
Chunghwa employees will be allowed to buyshares at either the IPO price or the auction price, whichever is lower.
Officials have said the underwriting price would be between 100 and 130 percent of the base price.
Taiwan has already privatized mobile telephony, leaving Chunghwa with a 30 percent share of the market. The government awarded the first private fixed-line telephony licenses in March.