| Summary: | 碩士 === 國立臺灣科技大學 === 管理研究所 === 90 === This research explains the history, the prevalent status, the operational efficiency and the positioning of bills financing in the domestic financial industry. It also describes the barriers and impediments hindering the progressive growth of the sector, and the solutions undertaken to overcome the numerous obstacles.
Based on a compilation of officially released figures and statistics along with the annual reports of various bills financing corporations, an analysis of the operational efficiency of several companies is made possible. The conclusion is derived from a comparison of the financial ratios of the targeted companies covering repayment ability, profit ability, managerial ability and financial structure. Analysis shows that the three bills financing corporations longest in existence performed far more superior to the newer established ones due to the solid background of their major shareholders, the abundant experience of their management teams, bigger scale of operations, broader customer base, higher net worth and larger assets, which in turn lead to a higher current ratio, lower liability ratio and better profits. The newer corporations, concentrating their strategies on market expansion, tend to keep prices extremely competitive as they try to lure existing clients of the older financing corporations to their sides. This factor coupled with the fact that they are newer field players and are in possession of fewer assets thereby worth lesser, undoubtedly leads to a higher ratio of liabilities and lower stability.
Two notorious scandalous cases that have rocked the local bills financing industry are tackled in this thesis. The first case is that of International Bills Finance Corporation. It is a fraud case in which a company employee by the name of Yang Rey Ren embezzled tens of billions of company funds by issuing counterfeit commercial papers. The company took the blow as it was harshly blamed for its overly laxed and lenient standards of internal control. Panic withdrawal ensued. Both the Chairman and the President of the company were immediately ousted by the authorities concerned, the Central Bank of China and the Ministry of Finance. The authorities further instructed Taiwan’s five leading banks to support the company and appointed Lin Hwa Deh as its new Chairman. Lin, unveiling his five key job responsibilities, was able to pacify the storm soon enough and was able to recover 90% of the company’s sales volume in just less than a year’s time.
The second currency scandal, the Central Bills Finance Corporation case, is one of mismanagement, erroneous strategy and unprofessional conduct. Aiming at increased operational efficiency, the President of Central Bills Finance employed a strategy of granting excessive loans not only to its major stockholders but also to clients with dubious standings with nowhere else to seek for credit with the hope of generating higher interests and commission fees. Nonetheless, the strategy backfired as the local economy went into a slump. The vicious domino-effect cycle was prominently felt as bounced checks from numerous Groups, particularly the construction sector, started pouring in and instigated the company’s loss of cash control. Concerned authorities immediately replaced both the Chairman and the President of the company. Further directives were given. All banks were told not to withdraw their monetary support to Central Bills and four large banks, Huanan Commercial Bank, First Commercial Bank, Chang Hwa Commercial Bank and Taiwan Business Bank, were specifically instructed to take credit rights through the conversion of debts to stocks. Hence, the goal of the new management focused on keeping its clients. Extensions were granted to the customers it guaranteed for the issuance of their commercial papers. Bad debts were written off; non-performing loans aggressively chased and paid in capital decreased to NT$ 1 million prior to a NT$ 6 billion cash-increased capital supported by the four banks. All these measures sought to sustain operations at normal levels and to regain what the company had lost in investments through time.
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