KMT faces huge financial crisis

The KMT, once the richest political party in the non-communist world, faces its worst-ever financial crisis after the party lost its 51-year grip on power in 2000, it was reported yesterday.

The Central Investment Holding Company, labelled as the KMT's "golden chicken" for bankrolling the party, plans to book a record NT$30 billion (US$857 million) in losses this year, a local Chinese-language newspaper said.

"That translates to the KMT being short of NT$4 billion in income, or half of the party's annual budget this year," an unnamed KMT official was quoted by the paper as saying.

The company contributed some NT$4 billion to the party in 2000 and managed to reach the targeted surplus last year by selling one of its subsidiaries, it said.

Debt-ridden companies a drag on earnings

The huge forecast losses stem largely from the takeover of at least three debt-ridden companies during the Asian financial crisis, when the party's money-raising Business Management Committee was governed by Liu Tai-ying (劉泰英), former president Lee Teng-hui's (李登輝) major financial adviser.

"Since then [the presidential election] the KMT's mammoth business empire has started to shrink at a pace faster than expected," the paper said.

While blaming the economic slump, the paper also pointed to the party's loss of cozy links with the government.

Banks reluctant to provide loans

Without that privilege, the Business Management Committee was not seen as a charmed business partner any more and banks were reluctant to provide loans to KMT business units, the paper said.

The paper noted that the KMT recently dumped shares of several companies on the stock market for billions of NT dollars.

The paper said the move was in response to the growing pressure from the DPP to track down KMT properties which the DPP alleges were stolen from the government.