Thu, Sep 23, 2004 - Page 1 News List

KMT wants to put its hands on assets

CONTROVERSIAL CASH The Chinese Nationalist Party is set to terminate a contract with Credit Suisse First Boston, in an effort to gain access to a multibillion dollar fund

By Ko Shu-ling  /  STAFF REPORTER

The Chinese Nationalist Party (KMT) yesterday announced it would terminate a contract with a financial trust company handling its party assets, in a move that would allow the party to resume its grip on assets estimated at NT$33 billion.

Fearing that the KMT will take the opportunity to sell assets it improperly acquired during its 50-year reign, Cabinet officials yesterday unleashed a fresh round of rebukes, and threatened to revoke the operating licenses of China Television Company (CTV) and Broadcasting Corporation of China (BCC) on Friday, if the companies are found to have violated related laws.

KMT Spokesperson Alex Tsai (蔡正元) said that the party has decided not to renew its contract with Credit Suisse First Boston to handle its assets.

"While we don't rule out any possibilities for disposing of our party assets, we thought it might be a good idea to adopt the Hua Hsia model to do so," he said.

Hua Hsia Investment Holding Co (華夏投資公司) has between NT$8 billion and NT$9 billion in KMT assets, while Central Investment Holding Co (中央投資公司) has more than NT$24 billion entrusted under Credit Suisse.

Through the party-run Hua Hsia, the KMT owns a 65 percent stake in CTV, a 96.95 percent stake in BCC and a 10 percent stake in Taiwan Television (TTV).

On Monday, Hua Hsia replaced two board members with people from Sycamore Ventures, part of US-based Citibank Venture Capital, a subsidiary of Citicorp.

The Broadcasting and Television Law (廣電法) and the Statute Governing Foreign Investments (外國人投資條例) ban foreign or Chinese investors from owning, funding or assuming key positions in the media.

The Government Information Office (GIO) has threatened to withhold the renewal of the operating licenses to CTV and BCC on Friday if the companies are found to have violated the laws.

About three years ago, the KMT's party assets were estimated at over NT$73 billion. The figure dwindled to nearly NT$30 billion due to the financial losses of Hua Hsia. Frustrated by its financial embarrassment, Hua-Hsia has been desperately trying to raise funds by borrowing money or selling its stakes in sub-companies.

Party authorities are hoping to get NT$8 billion (US$235 million) by selling the shares in CTV, BCC, the Central Motion Picture Corp, the Central Daily News and China Daily News in a single block offering before next year.

The party is required by the Broadcasting and Television Law to sell its stakes in media outlets by Dec. 26 because political parties and the government are no longer allowed to own, fund or assume key positions in media outlets.

Calling the KMT "a liar," Cabinet Spokesman Chen Chi-mai (陳其邁) yesterday questioned the KMT's desperate efforts to get rid of party assets in exchange for money.

"Why they're trying to get rid of their party assets is unfathomable to me," Chen said. "What they should've done instead is to keep their promise and return the assets they promised to state coffers."

KMT officials pledged last year that it would relinquish nine of its properties to the original owners. Those properties are seven movie theaters, the Shih Chien building and the Shih Chien Hall.

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