Sun, Feb 15, 2009 - Page 8 News List

EDITORIAL: Happy Valentine’s from the minister

After shooting off his mouth with his eye-popping prediction last year that the TAIEX would top 10,000 and even hit 20,000, Minister of Economic Affairs Yiin Chii-ming (尹啟銘) doesn’t seem to have learned anything about speaking with caution.

With Valentine’s Day approaching, the minister on Friday wished employees of ProMOS Technologies Inc a sweet lovers’ day. The greeting seemed innocuous enough, but given ProMOS’ circumstances and the minister’s position, it set the market abuzz with rumors and speculation.

ProMOS, a cash-strapped manufacturer of dynamic random access memory (DRAM) chips, has been seeking NT$5 billion (US$147 million) in emergency loans to help it repay US$330 million in overseas convertible bonds that will mature on Tuesday.

Since news of the chipmaker’s financial troubles emerged, investors have closely followed its movement to see whether the government would rescue it or let it fall. How the government deals with ProMOS would also be an indication of its direction in promoting consolidation in an industry where most companies are desperate for cash while the whole sector is mired in a glut.

At a sensitive time like this, an offhand remark from a ranking official easily becomes fodder for the rumor mill.

Local cable TV channel reports showed a group of reporters asking Yiin on Friday morning if ProMOS employees would have a happy Valentine’s Day.

The minister’s reply was: “I feel that tomorrow — Valentine’s Day — will be a good time.”

When reporters asked him whether his remark was an indication ProMOS was about to secure the much-needed cash from banks, Yiin replied with a smile: “Don’t you think I have given you the answer?”

Yiin’s ambiguous answer sent ProMOS shares soaring at the trade limit on Friday, with the daily transaction volume jumping three times its normal volume to more than 180 million shares.

However, ProMOS and bank representatives later denied they had reached an agreement on a loan deal, saying they were still holding intensive talks on the matter.

Yiin on Friday evening said his remark had nothing to do with the bank loan, adding that he was simply wishing ProMOS employees a good Valentine’s Day.

Financial regulations strictly prohibit listed companies and insiders from spreading rumors or distributing unconfirmed information as this could strongly influence share prices or become a tool for market manipulation.

It was lamentable that, as the head of a government agency tasked with overseeing the DRAM industry’s consolidation, Yiin — an insider — could have given such a careless answer.

Yiin also said on Friday morning that he hoped banks would agree to lend ProMOS the NT$5 billion, adding that the company had provided sufficient collateral for the loan.

On Friday evening, however, he said the loan was a commercial matter and the ministry would not intervene. Banks that are evaluating ProMOS’ loan application could have taken Yiin’s ambiguous remarks seriously, given that many of these institutions are either state-run or state-controlled.

Yiin made his infamous prediction about the stratospheric rise of the TAIEX before he took office in May — only to say that he was joking after he became minister. His behavior on Friday shows that he has yet to learn what his role is and how to act appropriately.

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