The value of the Central Motion Picture Corp (CMPC, 中央電影公司) was seriously underestimated when it was sold by a holding company owned by the Chinese Nationalist Party (KMT) in 2006, suggesting inappropriate property transfer, a report by the Ill-gotten Party Assets Settlement Committee said.
The KMT used to own a majority of CMPC shares until 1991, when it transferred all its shares to KMT-founded Hua Hsia Investment Holding Co (華夏投資公司), which was later sold to Central Investment Co (中央投資公司), another KMT-founded holding company.
Central Investment in April 2006 sold 82.57 percent of its CMPC shares to Lor Yu-chen (羅玉珍) and Chuang Wan-chun (莊婉均) at NT$65 per share, totaling NT$3.14 billion (US$103.9 million at the current exchange rate).
Photo: Chang Chia-ming, Taipei Times
Suspecting that CMPC was sold far below its value, prosecutors reopened an investigation into the transaction last month and former KMT legislator Alex Tsai (蔡正元) was detained for his role in the sale.
A committee investigation report released yesterday showed possible flaws in the method used to assess its value.
The share price was calculated according to CMPC’s book value per share of NT$72.49, multiplied by 1.09 (book value adjustment quotient) and 0.81 (share price adjustment quotient), with the committee expressing doubts about the reasonableness of the three figures.
The book value per share was mostly calculated based on the government’s “announced values” of CMPC properties, which were well below their real market values, so the book value of NT$72.49 per share “could not reflect the real value of the properties registered under CMPC,” the report said.
Accountant Lin Kuan-chao (林寬照), who assessed and verified CMPC financial records between 2005 and 2006, said that the estimated net worth of the company did not include the property value of five movie theaters, a printing factory and a dormitory, it said.
Accountant Chang Chin-yao (張錦耀), who assessed the transaction data and adjustment quotients, also said there were flaws in the estimation process.
The quotient of 1.09 was put forward by comparing CMPC’s financial structure with Taiyen Biotech Co (台鹽) and Taiwan Fertilizer Co (台肥), but it failed to take into account the fixed assets to net worth ratios of the two companies, which differed largely from CMPC, thereby making the comparison unobjective, the report quoted Chang as saying.
The quotient of 0.81 was also made unobjectively, Chang said.
“0.81 was quite subjective. There is no issue of liquidity for publicly traded stocks, but it constituted a problem for CMPC shares, which were not publicly traded. Therefore, [we] shaved about 20 percent off [the CMPC share price], which was quite subjective,” Chang was quoted as saying.
A hearing is to be held on Wednesday next week to determine whether the KMT controlled CMPC and whether the party sold the company below its market value to hide the party’s assets from government surveillance.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique