Democratic Progressive Party (DPP) lawmakers yesterday said that businesses with close ties to the administration of President Ma Ying-jeou (馬英九) received preferential treatment during the government’s efforts to stabilize the stock market.
The stocks of “Ma-friendly businesses” seemed to be priority targets as government-run funds were used to buy shares to stabilize the local bourse amid recent global economic turmoil, the legislators said.
The lawmakers identified the “Ma-friendly” firms as Yulon Motor Co, China Motor Corp, Far Eastern Group (FEG) and Foxconn Technology Group, because the heads of those conglomerates — Kenneth Yen (嚴凱泰) of Yulon, Douglas Hsu (徐旭東) of FEG and Foxconn chairman Terry Gou (郭台銘) — are all considered to be Ma’s close friends.
The TAIEX fell only 59.68 points on Tuesday after tumbling 5.35 percent in morning trading and closed up 243.2 points yesterday in part because four government-run funds — the labor insurance fund, the labor pension fund, the civil-servant pension fund and the postal fund — were used to prop up the stock market.
However, according to DPP Legislator Tsai Huang-liang (蔡煌瑯), Ma-friendly businesses fared “considerably better” than others during the government’s intervention.
“The DPP supports the government’s intervention to help stabilize the stock market, but the effort should be free of political considerations. The government should not sit there and watch people make a fortune from a financial crisis,” Tsai said.
DPP lawyer Hsu Kuo-yung (徐國勇) said the Chinese Nationalist Party (KMT), of which Ma is the chairman, might be involved in insider trading because the Central Investment Holding Co, a KMT-owned company with a net worth of about NT$20 billion (US$690 million), has been making enormous profits in the stock market since the party returned to power in 2008.
The KMT made a total of NT$1.79 billion through stock dividends from between 2005 and 2007, when it was the opposition party, but the firm’s profits soared to NT$6.92 billion between 2008 and last year, Hsu added.
The KMT was even able to make NT$1.54 billion in profits from stock dividends in 2009 amid a global financial crisis, Hsu said.
“I’ve been scratching my head and I find it difficult to explain how the KMT didn’t lose money in the stock market,” Hsu said.
“If the KMT is that good at investing, I urge the party to make its portfolio public so everyone can make some money,” Hsu added.
In response, KMT caucus whip Chao Li-yun (趙麗雲) said due process was followed for the operation of the four funds and dismissed the DPP’s accusations.
ADDITIONAL REPORTING BY STAFF WRITER
RSS