Wang, Tsai: Investing or speculating on property

Chang Kuo-tsai 張國財  / 

Wed, Dec 16, 2015 - Page 8

During election campaigns, candidates come under scrutiny not only for their policies and platforms, but also their moral character, trustworthiness, education, and financial and other assets. As long as it is not an unsubstantiated rumor or evidence fabricated to vilify a candidate, this is a legitimate part of any campaign.

However, in an attempt to the shift the focus away from allegations that Chinese Nationalist Party (KMT) vice presidential candidate Jennifer Wang (王如玄) engaged in speculative transactions of military apartments, the KMT has attacked Democratic Progressive Party (DPP) presidential candidate Tsai Ing-wen (蔡英文), accusing her of purchasing and selling land in a rezoned area in Taipei’s Neihu District (內湖) and earning NT$180 million (US$5.45 million).

It is not difficult to understand why the KMT is doing this, although it is questionable if it will have any effect.

There are three aspects to this issue.

First, information transparency versus non-transparent activities: On Jan. 15, 1985, the Taipei City Government announced detailed plans for building a light industry zone in Neihu. This information was open and transparent, with the government banning land transfers, division and construction beginning on Aug. 27, 1988.

On March 1, Tsai purchased 271 ping (896m2) of land, which was transferred to her name on April 15. In what way is this timing problematic?

Compare this with the conversion of veterans’ villages into military housing units: From tearing down the old buildings to completing the new military housing units and distributing them through a lottery process, the process is rife with opportunities for plotting and scheming. Not even the soldiers in the old veterans’ villages had any insight and they had no choice but to do as the Ministry of National Defense said. However, this complete lack of transparency gives those who are extremely resourceful and well-connected a chance to manipulate the process.

Second, investment versus speculation: Buying a property and holding it for a long time before selling it is investing. However, buying and then selling it within a short period of time is speculating.

Tsai bought 15 plots of land — on average only 18 ping each — for a total of 271 ping which, after rezoning, was reduced to 149 ping in 1988, and sold them all in 1997 — nine years later. Is this investment or speculation?

Wang, on the other hand, bought 12 military housing units, sold two of them less than a year after they were purchased, and sold the others between one and three years after they were bought. Is this investment or speculation?

Wang keeps saying that her moral standards are impeccable, but I am not sure everyone agrees with that.

Finally, there is the issue of legality. As long as one has money — and this, of course, includes Wang — one can legally buy and sell rezoned land. However, can anyone who has money — still, including Wang, of course — buy military housing units prior to or during the lockup period in which trading is prohibited?

Of the 12 units that Wang has admitted to trading, not one was bought before the five-year lockup period expired. This raises several questions about insider information, insider trading and illegal actions.

Buying and selling real estate legally is not a problem, regardless of how much profit you make. However, obtaining real estate from unclear sources or through improper means is wrong.

Chang Kuo-tsai is a former deputy secretary-general of the Taiwan Association of University Professors.

Translated by Perry Svensson