By Chris Wang and Mo Yan-chih / Staff Reporters
Wed, Jul 27, 2011 - Page 1
The Democratic Progressive Party (DPP) yesterday said claims by the Chinese Nationalist Party (KMT) that it has placed all its party assets into a trust are false and urged it to improve transparency on the matter.
Citing the KMT’s annual financial report, DPP spokesmen told a press conference that the KMT had placed “worthless” assets into a trust and put together a team of party officials and confidantes to run its companies and gain “unreasonable profit” through insider trading.
The KMT only placed NT$2.24 million (US$77,700) — a fraction of its billions — into a trust, DPP spokesman Chen Chi-mai (陳其邁) said.
“If the Financial Supervisory Commission does not launch an investigation into the ‘surrogate trust’ and ‘wallpaper trust,’ we do not rule out bringing the case to the Supreme Prosecutors’ Office Special Investigation Panel,” Chen said.
The KMT took over the assets of the Japanese colonial government and countless private businesses and individuals when it took control of Taiwan, a move many of its detractors have described as outright theft. It pledged in 2005 to sell all its assets, which had made it the richest political party in the world.
However, the DPP said the KMT’s annual financial report shows it has failed to deliver on its promise.
The KMT placed the US$24 million (based on the 1949 exchange rate) in public debt issued by the nationalist government in China before it fled to Taiwan in 1949 into trust on March 26, 2001, DPP spokesman Chuang Ruei-hsiung (莊瑞雄) said.
Auditors of the KMT report said that by law, the debt could not be sold, he said, adding: “In other words, the bonds are probably as worthless as wallpaper.”
Former KMT chairman Lien Chan (連戰) placed NT$2 billion into a trust in 2001, including the public debt and NT$13 billion in cash, Chuang said, but the cash fell to NT$2.49 million in 2005 and NT$2.23 million since 2006.
The NT$2.23 million account for an estimated 0.01 percent of the KMT’s total assets, Chuang said.
“We wonder where all that money has gone,” Chuang said, adding the KMT has been lying to Taiwanese.
Controversy surrounding the Central Investment Holding Co (中央投資), a company with a net worth of about NT$20 billion, resurfaced after data published by the Ministry of Interior on Friday showed that the company’s stock dividends accounted for almost NT$2.9 billion last year and made up more than four-fifths of the KMT’s total earnings.
KMT spokesperson Lai Su-ju (賴素如) had said on Friday that the party did put most of its assets into a trust and that it would sell Central Investment Holding Co, the last of its most controversial assets, via a transparent process.
However, DPP spokesman Liang Wen-jie (梁文傑) said all seven members of the company’s board of directors were former KMT members or professionals with strong ties to the party. Auditors have listed the company, as well as its spin-off, “Hsinyutai Co” (欣裕台股份有限公司), as long-term investment projects, which means they are still run like a private company, he said.
The two companies invested NT$18 billion on the local stock market last year and received NT$2.9 billion in dividends, a 16 percent return on investment and almost double the national average return on investments last year, the DPP officials said.
Given the close connections between the company’s directors and the KMT administration and its high profit rate, it would appear the KMT has engaged in insider trading, Liang said.
Lai dismissed Liang’s allegations and insisted the party wants to sell Central Investment Co via a public bidding.
Lai said there were no full-time KMT officials left on the firm’s board of directors and that the seven KMT members who managed the company did not hold any party office.
Reiterating that the KMT would handle the sale of the company in a public and transparent process, Lai said that under former KMT chairman Wu Po-hsiung (吳伯雄), the party had put its assets into a trust fund and invited experts to handle their management.
Handling the party assets was a major promise of President Ma Ying-jeou (馬英九) when he first became the KMT chairman in 2005. He had promised to find a final solution to the party asset issue and said the party would no longer run any businesses once the issue had been resolved.
Central Investment Co was the last piece of KMT-owned business after it sold the building housing the Policy Research and Development for NT$4.3 billion and the China Television Co, the Broadcasting Corp of China and the Central Motion Picture Co to the China Times Group for NT$9.3 billion in 2005.
The party has failed in four separate tries to sell Central Investment Co — in 2006, February 2009, June last year and in January.