The Ministry of Economic Affairs yesterday rebutted allegations that it would sell the debt-ridden Sino Swearingen Aircraft Corp (SSAC, 華揚史威靈) to Emirates Investment and Development Co (EIDC) before the new administration takes office on May 20.
The ministry’s announcement came after Chinese Nationalist Party (KMT) Legislator Lo Shu-lei (羅淑蕾), echoing a report in the latest edition of the Chinese-language Next Magazine, accused Minister of Economic Affairs Steve Chen (陳瑞隆) of sending Max Lo (羅正方), chairman and CEO of SSAC, to attend a public hearing held by the Committee on Foreign Investment in the United States on April 30 to sell SSAC’s shareholding to EIDC.
SSAC is a Taiwan-US joint venture aircraft manufacturer. EIDC is a venture capital firm from the United Arab Emirates.
As the legislature’s Finance Committee had declared on March 6 that it would halt the transfer of national assets prior to May 20 in a bid to stop the ministry from “underselling” SSAC to potential buyers, KMT legislators Ting Shou-chung (丁守中) and Wong Chung-chun (翁重鈞) yesterday accused the ministry of violating the legislature’s decision.
“Max Lo should not have participated in the hearing since the resolution bars [the ministry] from selling the company,” Lo Shu-lei said, adding that the sale of SSAC could be completed on May 14 if the sale was approved by the US.
Lo Shu-lei said that although the ministry claimed that the SSAC would be sold to the EIDC for US$150 million, the contract the ministry intended to sign with EIDC showed that the company would be able to get hold of 80 percent of SSAC’s shares by spending only US$50 million.
Of the US$50 million, US$15 million is owed to EIDC for loans made earlier to the SSAC, Lo Shu-lei said, adding that the contract also requires the government to invest the remaining US$35 million into the SSAC after the sale.
“Steve Chen was lying to dodge legislative oversight. It was as if we were giving out our own property to other countries but we could not get a penny back,” she said.
Chen yesterday rebutted the accusation, saying: “The plan to sell the government’s stake in SSAC started two years ago. It’s not as if we were in a hurry to get the deal done before May 20.”
EIDC was the only interested investor and the terms offered were the best, Chen told reporters outside the weekly Cabinet meeting.
Vice Minister of Economic Affairs Shih Yen-shiang (施顏祥) also denied the accusation.
“The merger application was submitted by EIDC [not the ministry] to the Committee on Foreign Investment in the United States. Max Lo, as the chairman of SSAC, was obliged to attend,” Shih told the legislature’s Economics Committee.
Shih said that the US committee would make its final decision on May 14 at the earliest or postpone it for another 45 days if necessary. If the application is approved, the ministry will then have to decide whether to accept the merger plan or not.
“Even if the government accepts, the settlement process will take at least another month. Under normal circumstances, the final decision will not be made until minister of economic affairs-designate Yiin Chii-ming (尹啟銘) takes office,” Shih said, adding that he had already informed Yiin about the case.
If the new government refuses, it may face lawsuits, Shih said.
Additional reporting by Flora Wang and and Shih Hsiu-chuan