Sun, Mar 27, 2005 - Page 8 News List

Complete accounting needed in UMC case

By Karl J. C. Chang張人傑

Now that the question of United Microelectronics Corp's (UMC) involvement with China-based He Jian Technology Co (Suzhou) has entered judicial proceedings, the furor over the case has gradually died down.

But surprisingly, certain major newspapers on March 21 ran an advertisement placed by UMC chairman Robert Tsao (曹興誠) to inform UMC shareholders of the "latest developments" in the He Jian case.

Reading carefully through the content of the advertisement, it is not difficult to see the anxiety with which the principals in the case are trying to defend themselves and escape from their current predicament.

Their contorted reasoning, contempt of the law and attempt to shirk responsibility for their actions have only served to substantiate public accusations and suspicions.

While we can respect both the dignity and interests of UMC, there are some matters of right and wrong regarding the way the UMC management has responded to this case that still deserve our attention.

First, regarding the issue of "breach of trust" and violating the "Security Exchange Law" (證券交易法), should the case be settled out of court simply through the payment of "compensation"?

Or should it be left unresolved? Since the case involves judicial credibility and the rights and interests of the public, we believe that the judicial authority will need to pass judgement.

Second, UMC admitted that it brushed over its investment in and technical assistance to He Jian as part of its operational strategy, so it has clearly violated the Statue Governing Relations between the People of the Taiwan Area and the Mainland Area (兩岸人民關係條例) and the Foreign Investment Review Law (對外投資審議條例).

If this action was taken as a result of an individual's decision, that person should compensate UMC for any financial loss. If it was a corporate decision by UMC, the firm should now be considered a "deviant corporation."

Third, if UMC violated the government's statutes as a result of management negligence or lack of supervision, harming the public and national interests as a result, and if there has been negligence on the part of the Mainland Affairs Council, the Investment Commission of the Ministry of Economic Affairs, the Securities and Futures Bureau under the Financial Supervisory Commission, or other governmental agencies which contributed to the situation, then UMC and these agencies should all be investigated.

Fourth, as to the lifting of the order forbidding He Jian's Taiwanese management personnel from leaving Taiwan, since the order may encroach on He Jian's interests and the human rights of the individuals concerned, the judicial authority is required to investigate the matter to obtain a legal basis to restrict their freedom of movement.

Fifth, UMC wants to be admired by the public. But UMC has not made clear which technologies and patents it has transferred to China, nor their value or the process by which they will be transferred. UMC must clearly explain all of this in detail.

Otherwise, how is the public supposed to understand whether UMC has violated the laws that control international technology transfers?

We hope that UMC's announcements in the media were made to explain the truth, admit its wrongdoings and express its intention to improve. If UMC's announcements were intended to mislead the public by using the media to conceal illegal and unreasonable acquisitions, or even shape public opinion to influence the courts, it would not be acting wisely.

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