Fri, Sep 30, 2011 - Page 1 News List

DPP accuses KMT of profiting from movie firm sale

By Lee Hsin-fang, Tsai Yi-hsuan AND Peng Hsien-chun  /  Staff Reporters

The Chinese Nationalist Party (KMT) is trying to hold on to its ill-gotten state assets, the Democratic Progressive Party (DPP) said on Wednesday.

DPP Central Committee member Tuan Yi-kang (段宜康) and legislative candidate Lee Chien-chang (李建昌) showed an alleged contract between the KMT and Lor Yu-chen (羅玉珍), the wife of Central Motion Pictures Corp (CMP, 中影) chairman Gou Tai-chiang (郭台強), for the sale of CMP in 2006.

According to the DPP, the contract says the KMT and Gou signed a profit-sharing agreement that once Gou assumed management of CMP, he was to sell the three major real-estate properties under the CMP — namely the Bade Building housing KMT headquarters, the New World Building housing the Wonderful Theatre and the Chinese Culture and Movie Center.

If the buildings were sold for higher than the agreed price, a portion of the profit should be handed over to the KMT, the contact allegedly says.

The floor price for the Bade Building was set at NT$1.5 billion (US$49 million), with all profit from the sale multiplied by the KMT’s original holding of 82.56 percent of CMP shares going to the KMT. The New World Building’s starting price was set at NT$1.2 billion, with two-thirds of the profit multiplied by the KMT’s holding going to the party. For the Chinese Culture and Movie Center, the starting price was set at NT$2.6 billion, with half of the profit times the KMT’s holding being transferred to the party.

Lee said that before the KMT sold the CMP “at a discount price” to Gou, internal documents from the CMP showed that the party had hired a consultant to assess its total value, which placed its worth, including up to 12 assets owned by the company, at NT$9.8 billion. However, the party sold CMP to Gou in April 2006 for only NT$3.1 billion.

Lee alleged that the agreed, undisclosed amount was even lower at NT$1.9 billion, with Gou having paid only NT$200 million by June 2007 with a promise to pay the remaining NT$1.7 billion via a check after 2008.

The KMT acquired CMP’s assets when it took over Japanese-owned industries and because the government agreed to license it off without paying compensation, Tuan said, adding that they are therefore national assets.

Tuan accused the KMT of being a “robber baron” by taking and then selling national assets on the cheap and making huge profits in return.

KMT spokesperson Lai Su-ju (賴素如) rebutted the allegations and said the party consulted professional local organizations before selling its CMP stake.

The real-estate market was weak at the time and the CMP was worried it would not be able to make the deal, Lai said, adding that in order to safeguard its interests, it insisted that the buyer sign a profit-sharing agreement.

With real estate prices later soaring, it shows that the CMP’s decision was correct, Lai said.

There is no such thing as selling the CMP cheap, Lai said, adding that she did not know where the DPP had obtained the documents.

Translated by Jake Chung, Staff Writer

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