The disappearance of United Microelectronics Corp (UMC) chairman Robert Tsao (曹興誠) is only the latest twist in the firm's breach of trust controversy. On Monday, Tsao placed a half-page advertisement in national newspapers announcing that He Jian Technology (Suzhou) was willing to comply with a "verbal agreement" it reached with the firm and allocate a 15-percent stake to UMC valued at US$110 million. The ad sparked heated discussion in the media, as did Tsao's first advertisement on Feb. 18, which asked prosecutors and police not to pursue the case.
The latest advertisement, titled "Informing UMC shareholders of the latest development in the He Jian Technology case," raises many questions. What is the real relationship between UMC and He Jian? Why did UMC originally deny investing in He Jian? Why was an agreement over such a large sum not put into writing? And how can the 15 percent stake be verified so that shareholder interests are protected?
Finding answers to these questions depends on the government's response, especially whether it will act against a company with an international reputation that is openly violating rules on investment in China.
But this is the only way of providing a reasonable guarantee that law-abiding companies can compete on fair terms and that government credibility will be sustained.
If it is proven that an illegal relationship between UMC and He Jian exists, UMC's behavior will have constituted a breach of trust. UMC's operations must be made transparent. This would be the best guarantee for investors, and for UMC, who would then be able to continue openly with its investment plans in China -- if it is not responsible for underhanded dealings.
If it is found that the senior management of UMC broke the law by investing in He Jian, they should be punished. On the other hand, this alleged transgression is no reason to write off UMC, for Tsao has never been the kind of person who cares only for profit.
He is well known to be deeply concerned with the development of advanced technology. Tsao used his money and his considerable influence to assist Academia Sinica President Lee Yuan-tseh (李遠哲) when he took up the post by establishing the Foundation for the Advancement of Distinguished Scholars and encouraging the nation's high-tech elite to return to Taiwan to make a contribution. His efforts on behalf of the public good should not be forgotten.
The UMC case has given the government an opportunity to reflect on its performance. With the nation's investors so attracted to the China market, it is clear that the Executive Yuan's "active opening-up and effective management" strategy is little more than a joke.
If the government wants to reformulate its strategy for cross-strait investment, it must consider the issues of national security, financial activity on both sides of the Strait, political and legal matters and the growing risk of China's financial markets.
Then it will be able to create a policy that can guide Taiwan's businesspeople to spread risk and invest in other countries. This is the foremost challenge for Premier Frank Hsieh's (
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