With the presidential campaign a month away, the Chinese Nationalist Party (KMT) released declassified documents related to Yu Chang Biologics, now known as TaiMed Biologics, alleging that Democratic Progressive Party (DPP) presidential candidate Tsai Ing-wen (蔡英文), in her capacity as vice premier, had approved the company’s establishment in 2007 mere months before resigning and taking up a position as the company’s chair, and so is suspected of having profiteered from the firm. The Yu Chang case has been sitting around for more than three years; that it has been resuscitated so close to the election reeks of political games.
Council for Economic Planning and Development Minister Christina Liu (劉憶如) has made clear there are no allegations of unlawful conduct in the Yu Chang case, but that there had been some procedural irregularities. This, she said, made it a political issue, as opposed to a legal one.
The first of these irregularities involved making certain documents classified, the most significant being when Academia Sinica president Wong Chi-huey (翁啟惠) invited scientific experts in the field to participate in the preparatory stages of a biotechnology company, and kept documents classified to maintain the confidentiality of those involved. The second revolves around two other classified documents, one of which was sent to then-premier Su Tseng-chang (蘇貞昌) and Tsai for approval, and the second of which was sent only to Tsai.
According to Ho Mei-yueh (何美玥), who at the time was with the council and responsible for the investment case, the first document needed to be handed to the Cabinet for review and approval at the most senior level, but that the second document was merely a report on the progress of the negotiations and only needed to be seen by the vice premier.
The next question concerned whether Tsai broke the “revolving door” clause about officials and private sector work. The National Development Fund is operated by the council, with the Cabinet playing a supervisory role. Yu Chang was not directly connected with the Cabinet, so there was no violation of the law here, either.
Finally, there is the allegation that Tsai’s family profited from involvement in the Yu Chang case. When Liu initially said that TaiMed Group was the same as “Taimao,” the company started up by Tsai and her family, it was a case of the council getting its chronology wrong by confusing Taimao with TaiMed Biologics. Taimao predated TaiMed Biologics — not TaiMed Group — and was set up by Tsai and her family as an investment company after Tsai had agreed in August 2007 to join the TaiMed Group negotiating team. The idea was that the family would first invest in Taimao and that Taimao would invest in Yu Chang, leaving the way open for other private funds to invest as well. The Tsai family withdrew a year after Yu Chang was established, retaining only their original investment and the interest on it, to the tune of more than NT$10 million (US$330,600).
The KMT has said Yu Chang stocks lost half their value, trading at NT$5 each, hinting that this was a failed investment, perhaps even fraud. However, biotech firms require long periods of investment to carry them through the protracted process of developing, patenting and formally marketing products before the company can start turning a profit.