Premier Chang Chun-hsiung (
Chang said the government was happy to see such a company established and was funding its operations.
Chang declined, however, to comment on the function of the company.
Chang made the remarks in response to questions about a report in yesterday's Chinese-language China Times that said the administration "secretly established" an arms company.
The newspaper said that Vice Premier Chiou I-jen (邱義仁) was behind the operation and that Wu Nai-jen (吳乃仁), a stalwart of the Democratic Progressive Party's (DPP) now disbanded New Tide Faction, was tipped to become the president of the newly founded company.
The report said the company, Taiwan Goal, had been up and running for about six months and would serve as a platform to integrate the arms industry and arms procurement projects. In addition, the firm would export domestically produced arms, the report said.
Regarding Wu's appointment, Chang said appointees to the firm could be changed in the future.
Chang said that appointing a political figure to the position was not a problem because the position is unpaid and does not come with a public vehicle or chauffeur.
Wu yesterday issued a statement confirming that Taiwan Goal had been established last month and that he was serving as president without pay.
Wu said the company was a private business. However, he said he would resign from the post after the election in May to allow the nation's next president to appoint a new company chief.
Since the company was established at the end of last month, Wu said that it was in talks with several arms suppliers abroad about jointly providing arms maintenance services.
Wu said he did not expect to see any contracts signed before May 20, the inauguration date of the new president.
Wu said the purpose of the company was to serve as a bridge between foreign suppliers and domestic buyers and ensure the maintenance of weapons systems, while driving the domestic military and the defense industry to upgrade technology.
Minister of National Defense Lee Tien-yu (
In response to the news, Chinese Nationalist Party (KMT) presidential candidate Ma Ying-jeou (
"As a caretaker government, it should not make any big moves or changes. Otherwise society will pay a hefty price when the new government makes changes again later," Ma said.
KMT Legislator Lin Yu-fang (林郁方) questioned the Ministry of National Defense's role in the establishment of the company.
Lin said the company was established by the government in exchange for help from the New Tide Faction with DPP presidential candidate Frank Hsieh's (謝長廷) campaign.
"Chiou I-jen and Wu Nai-jen [who were affiliated with the faction] alone are able to decide on NT$50 billion [US$1.5 million] in annual defense industry transactions ... I believe that the establishment of the company was an under-the-table deal [between the DPP and the faction]," Lin told a press conference.
KMT Legislator Shuai Hua-min (
"Arms procurement requires professional knowledge and should not be entrusted to a private company ... The [KMT] caucus will never allow it to exist," Shuai said.
Lin threatened to impeach Lee over the investment.
Additional reporting by Mo Yan-chih, Flora Wang and CNA
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