The surprise resignation of Steven Chen as Chairman of Chunghwa Telecom last week has thrown the region's investment bankers into something of a spin. Just last week, Chunghwa sent out a request for proposals to around 15 investment banks to organize and underwrite the former Taiwanese telecom monopoly's international IPO. The deal is set to be structured as a $4 billion ADR issue and the mandate to lead manage it is one of the most prized in the region.
Many junior investment bankers are already working on the pitch books, spending long nights in the office devising clever ways to put their firm at the top of the league tables. Meanwhile, the more senior bankers are focusing on the other way of winning a mandate - namely schmoozing the top guys at the client company.
Chen's resignation means all the good work that those senior bankers have done over the past few years has been in vain. "We've wasted a hell of a lot of time on that guy, " said one exasperated banker, not surprisingly speaking off the record. Another banker admitted that his firm had met with Chen between 25 and 30 times over the past few years, purely in the hope of gaining an advantage when the mandate was awarded. This same banker says that he would be totally surprised if rival banks had not seen Chen as many times as he had.
Chen claimed that his age at 66 was the reason why he wanted to leave. But your correspondent thinks otherwise. The memory of 15 different investment banks meeting him 30 times each without any deal on the horizon must have been harrowing enough. The prospect of what they will do when the actual IPO process starts must have been absolutely terrifying. One can imagine Chen sweating through bad dreams of Hermes ties and loud braces; endless rounds of power point presentations with slides titled "Mega Bank - A Client Focused Firm"; excruciating dinners with swarthy European, swanky American and superior Japanese bankers. The thought must have been too much.
But what of the man to replace Chen? Mao Chi-kuo was one of the two vice ministers at the Ministry of Transport and Communications - the regulator of the telecom industry in Taiwan. Not much is known of him in financial circles outside Taiwan because he is a thorough technocrat, not a corporate type at all. He has a PhD in civil engineering from the prestigious Massachusetts Institute of Technology and his quick appointment is seen as a political message that the government is keen to get the deal done. Moreover, Mao is fluent is English - a skill that might come in useful when deciphering what on earth the bankers are talking about when referring to global client leadership, pushing the envelope and thinking out of the box.
