Mon, Jul 28, 2003 - Page 11 News List

Deadbeats take taxpayers cash and give it to China

MASSIVE DEBTS Why are Taiwanese businessmen allowed to continue ignoring their debts to state-run banks while investing heavily in ventures in China?

By Tsai Yu-jen   /  WIN-WIN WEEKLY REPORTER

The banks have tried to auction off the deadbeats' collateral but have failed. In contrast, their businesses on the other side of the Strait are growing by the day. Each of them is investing large sums of money in those businesses, and none of them have borrowed money from Chinese financial institutions.

The Executive Yuan's financial reform task force is constantly reviewing how the financial institutions are disposing of their bad loans.

It has proposed an NT$600 billion financial reconstruction fund to stop the gap at the banks. One can't help but wonder: What is the reasoning behind having the entire public clean up the mess left behind by these deadbeat tycoons?

According to an investigation by Win-Win Weekly, Chen and his companies left behind debts totaling as much as NT$100 billion in Taiwan.

These include debts owed by:

-- Grand Union Construction Co Ltd (全盈隆建設), a major holding company that changed its name from Tuntex Group Construction Co (東帝士建設);

-- Tung Hua Development Corp (東華開發), which built the Daguan housing district (達觀鎮) in Hsintien City;

-- Tuntex Distinct Corp (東雲), which is chaired by Su Chih-cheng (蘇志誠);

-- Tuntex Petrochemicals Inc (東展興業), in which Chen still holds 50 percent of the shares.

In contrast, his businesses in China are growing by the day. For example, construction of the Donglian Mansion (東聯大廈) near Beijing's Desheng Gate has been completed. Chen's partner in that project is the "Taiwan Affairs Office" of the Beijing city government. The building also houses some city government offices. One wonders how much money Chen pumped into China to accumulate such connections and influence.

On June 13, Chen quietly arrived in Beijing from Xiamen to handle some private affairs. The Taipei District Court had issued an arrest warrant for Chen on a charge of embezzling more than NT$800 million from Tung Hua Development Corp.

As a partner of Beijing's Taiwan affairs office, Chen naturally was given a courteous reception in Beijing. Taiwan's arrest warrant did not seem to have any effect on him.

In Taiwan, even Chen himself has said the Tuntex group now exists in name only.

Over the past few years, he has successfully divided the conglomerate into independent entities so that the good companies can avoid being encumbered by the financially unsound ones.

Chen still plans to take back a leading role any time, including at Tuntex Petrochemicals Inc, which is a major manufacturer of purified terephthalic acid that has started to turn profitable.

Chen is an influential magnate in the US, Thailand and China. In particular the Xiamen Xianglu Group, which paid more than 600 million yuan in taxes last year, has set a stable foundation for Chen to cultivate his influence in China.

Hone Shee group chairman Chang, who was bogged down by another land development project in Hsintien City, allegedly bounced almost a thousand cheques in Taiwan more than a year ago. The group's affiliated businesses and individuals have all been blacklisted by Taiwan banks.

Meanwhile, a golf course he built in the Beijing Economic and Technology Development Zone has now become an important gathering place for Beijing's political and business luminaries.

Here in Taiwan, a financial crisis have prompted banks to try several times, unsuccessfully, to auction off the Hone Shee Villa and golf course. Chang's business in Beijing, meanwhile, has blossomed and borne fruit.

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