Sun, Jan 14, 2007 - Page 1 News List

Su performs scandal damage control

FINANCIAL PROBLEM The premier met the president as part of his efforts to show the Cabinet was doing all it could to deal with the Rebar case, but not everyone was happy

By Jimmy Chuang  /  STAFF REPORTER , WITH CNA

After the president returned from his trip abroad yesterday, Premier Su Tseng-chang (蘇貞昌) rushed to meet him amid mounting criticism that Su had reacted slowly to the Rebar Asia Pacific Group (力霸亞太企業集團) scandal.

While in Nicaragua, President Chen Shui-bian (陳水扁) placed a call to Su and asked him to "be more vigilant" about the situation.

Two subsidiaries of the group -- China Rebar Co (中國力霸) -- and Chia Hsin Food and Synthetic Fiber Co (嘉新食品化纖) announced on Jan. 4 that they had applied for insolvency protection on Dec. 29 after suffering losses of more than NT$25.2 billion over the past seven years.

The move triggered a run on The Chinese Bank (中華銀行) -- also a subsidiary of the Rebar Group -- on Jan. 5.

After a two-hour meeting at the president's residence, Cabinet Spokesman Cheng Wen-tsang (鄭文燦) told the press that the president stood behind Su and his handling of the Rebar scandal.

"The premier did not offer his resignation to the president and they did not discuss potential candidates for the chairmanship of the Financial Supervisory Commission [FSC]," Cheng added.

Shih Jun-ji (施俊吉) resigned as FSC chairman on Friday night over the Rebar scandal. Su approved Shih's resignation.

During the meeting, Su briefed Chen on the latest developments in the Rebar scandal and the Cabinet's efforts to deal with it, Cheng said.

Following the meeting with the president, Su returned to his office and called for a meeting with economic officials.

"The Cabinet now has the green light to go all the way in its investigation of the Rebar case, and to come up with proper punishments for specific individuals within the shortest time, and we will," Cheng said.

Prior to his meeting with Chen, Su, speaking at a separate event yesterday morning, said "the [Rebar] case is just like a time bomb."

"This bomb has been ticking for more than a decade, and it just so happened that it was I who was holding the bomb when it blew up," he said.

Referring to the government's decision to intervene and take over The Chinese Bank, Su said that the government was not using taxpayer's money funds to reimburse depositors.

According to the regulations of the Financial Reconstruction Fund, the government must not only take over a troubled bank, but must ensure that all depositors can withdraw their money, he said.

Meanwhile, opposition parties continued to find fault with the government's handling of the scandal.

Chinese Nationalist Party (KMT) Chairman Ma Ying-jeou (馬英九) condemned Chen for what he described as turning a blind eye to the scandal, urging the president to apologize to the public.

"[Rebar Group founder] Wang You-theng (王又曾) accompanied President Chen seven times on diplomatic trips and has close ties with the government. That is why financial overseers couldn''t handle the scandal," Ma said during a trip to Taoyuan County.

Wang was a senior member in the KMT.

Ma added that Su should take partial responsibility for "failing to solve" the financial crisis, and although Shih had resigned on Friday, Chen's "close ties" with Wang made the president the one who should shoulder responsibility.

"It's unfair to ask Shih, who took over the position not long ago, to take responsibility," he added. "We should find out the backstage manipulator who was influencing policy."

Presidential Office Spokesman David Lee (李南陽) called Ma's remarks "unfair."

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