A court has issued a verdict in a decade-long management rights dispute between Taishin Financial Holding Co and the Ministry of Finance, in which Taishin sought compensation for losses over the right to manage state-run Chang Hwa Bank (CHB).
The dispute originated in the second wave of financial reform during former president Chen Shui-bian’s (陳水扁) administration, the government that took power following Taiwan’s first transition of power.
The ministry wanted a private bank to inject capital into CHB, and Taishin made the highest offer, so was awarded management rights over the bank. However, following the second transition of power, President Ma Ying-jeou’s (馬英九) administration accused the Chen administration of corruption and launched a probe to determine if anyone involved in plan had broken the law.
In the end, despite failing to find evidence of any wrongdoing, public discontent with big business caused the Ministry of Finance to overturn the government’s pledge and take back management rights over CHB.
Today, as we are about to go through a third transition of government, a court decision has ruled both in favor of and against Taishin and the ministry. Basically, the ruling says that news releases and official documents issued by the ministry at the time constitute an offer to potential investors and that when Taishin agreed and increased its offer, the two parties established a contractual relationship.
If this verdict is finalized, it implies that Taishin will be able, through its own efforts, to regain management rights to CHB. How should the public, as the masters of the nation, look upon this situation? Are judges influence peddlers working for big business?
Publisher and writer Rex How (郝明義) earlier this year published “A Letter To Xi Jinping (習近平) Ahead of the Presidential Election,” in which he said that Taiwan’s younger generation is becoming increasingly aware of the need to review previous thought modes and habits that have come to be seen as orthodox, as well as the need to consider answers based on a new outlook on life and a new set of values. Perhaps the ruling offers an opportunity for further reflection.
It is not a matter of influence peddling on behalf of big business; rather, it highlights the sanctity of contracts and the need to adhere strictly to contractual obligations, and it brings Taiwan one step further along the road to becoming a nation that respects contracts and the rule of law.
What does that mean?
Due to its geographical location, Taiwan has not submitted itself to the kind of isolation and protectionism that China did following the era of exploration in the 1400s and the 1500s. Instead, it has been engaged in constant exchanges with East and South Asia, and as Portugal, the Netherlands, Spain and other nations expanded their trade, Taiwan slowly took up a place in the international trade system as a maritime state focused on trade and exports instead of remaining a purely agricultural society.
To be able to engage in trade and economic exchanges means stressing contractual freedom and equal rights while respecting market mechanisms.
The reason for the decline of traditional China was that it was a nation ruled through punishment that placed supreme power in a dynasty, was administered by self-serving bureaucrats, placed family above the individual and substituted punishment for law. In contrast, European societies focused on individualism that has a developed sense of privacy.
After Christianity became the state religion of the Roman Empire, the separation between imperial and papal power slowly developed into a society respecting contracts that gave supremacy to the law and stressed the equality of all people before the law.
Following the enlightenment, democracy, republicanism, human rights guarantees, the separation of powers, legally regulated punishment, contractual freedom, the inviolable sanctity of private property and so on became the shared principles of constitutional democracies.
The judiciary was no longer a tool for protecting the ruling classes, its purpose instead became to restrain the executive and legislative powers, prevent abuses of power and protect people’s freedom and property rights.
Although Taiwan’s economic development always has been focused on international trade, it introduced constitutional democracy and a separation of powers following the democratic transition.
However, in practice Taiwan has never understood the true meaning of the Western concept of the constitution as a contract between the state and the people and between peoples. This is why we always stress harmony, order and the supremacy of the state, have a political and economic system serving those in power and set up state-owned and partially state-owned companies.
Because most resources are controlled by the state, politicians are able to distribute these resources and make appointments, with the result that power is exchanged for money and corruption becomes rampant.
If we want to become a regular nation and leave this self-serving, power-centered system behind, it is necessary to establish a truly equal and free social contract.
Since the dispute over the management rights to CHB is a dispute over the government’s pledge to use a capital injection to transfer state resources to the highest bidder, and since Taishin increased its bid because it had a chance to obtain the management rights and thus defeated its main competitor, Singapore’s Temasek Holdings, the government should live up to its pledge and follow through on the contractual conditions.
Following the second transfer of power, Ma’s administration should not have resorted to using government power and punishment to force action, nor should it have ignored the previous government’s pledges and retracted CHB management rights with no evidence of wrongdoing found.
As to the judiciary, it should be neutral and independent of the government and public opinion. In the current verdict, the court has protected contractual freedom and safeguarded the rights and interests of Taishin and all shareholders.
Although it might seem as if it has hurt both the nation and the public, in the end, it has drawn a line in the sand by saying that the government should live up to its pledges and equal treatment and it should let everyone know that Taiwan is a nation that respects contracts, which encourages the development of private industry, which makes it attractive to foreign businesses, while at the same time laying a legal foundation for national prosperity.
Lin Meng-hwang is director of the Civic and Law-Related Education Foundation.
Translated by Perry Svensson
Could Asia be on the verge of a new wave of nuclear proliferation? A look back at the early history of the North Atlantic Treaty Organization (NATO), which recently celebrated its 75th anniversary, illuminates some reasons for concern in the Indo-Pacific today. US Secretary of Defense Lloyd Austin recently described NATO as “the most powerful and successful alliance in history,” but the organization’s early years were not without challenges. At its inception, the signing of the North Atlantic Treaty marked a sea change in American strategic thinking. The United States had been intent on withdrawing from Europe in the years following
My wife and I spent the week in the interior of Taiwan where Shuyuan spent her childhood. In that town there is a street that functions as an open farmer’s market. Walk along that street, as Shuyuan did yesterday, and it is next to impossible to come home empty-handed. Some mangoes that looked vaguely like others we had seen around here ended up on our table. Shuyuan told how she had bought them from a little old farmer woman from the countryside who said the mangoes were from a very old tree she had on her property. The big surprise
The issue of China’s overcapacity has drawn greater global attention recently, with US Secretary of the Treasury Janet Yellen urging Beijing to address its excess production in key industries during her visit to China last week. Meanwhile in Brussels, European Commission President Ursula von der Leyen last week said that Europe must have a tough talk with China on its perceived overcapacity and unfair trade practices. The remarks by Yellen and Von der Leyen come as China’s economy is undergoing a painful transition. Beijing is trying to steer the world’s second-largest economy out of a COVID-19 slump, the property crisis and
As former president Ma Ying-jeou (馬英九) wrapped up his visit to the People’s Republic of China, he received his share of attention. Certainly, the trip must be seen within the full context of Ma’s life, that is, his eight-year presidency, the Sunflower movement and his failed Economic Cooperation Framework Agreement, as well as his eight years as Taipei mayor with its posturing, accusations of money laundering, and ups and downs. Through all that, basic questions stand out: “What drives Ma? What is his end game?” Having observed and commented on Ma for decades, it is all ironically reminiscent of former US president Harry