Wed, Aug 12, 2015 - Page 3 News List

Far EasTone merger threat to media: TSU

PRESS FREEDOM AT STAKE:The Taiwan Solidarity Union said that Far Eastern Group, which owns the telecom, has close ties to the Chinese Nationalist Party (KMT) and Beijing

By Chang Hsiao-ti and Jonathan Chin  /  Staff reporter, with staff writer

Taiwan Solidarity Union caucus whip Lai Chen-chang, center, speaks during a news conference in Taipei yesterday, saying that the National Communications Commission should scrutinize a merger between Far EasTone and China Networks Systems.

Photo: Chu Pei-hsiung, Taipei Times

Concerned that Chinese investment might impact negatively on Taiwan’s media, the Taiwan Solidarity Union (TSU) caucus yesterday called on the National Communications Commission (NCC) to closely scrutinize a merger between Far EasTone Telecommunications Co Ltd and China Network Systems Co (CNS).

Far EasTone, the nation’s third-largest telecommunications operator, announced on July 30 that it had inked an agreement with Morgan Stanley Private Equity Asia IV (MSPE) to subscribe to corporate bonds issued by the latter’s local subsidiary, paving the way for its acquisition of a major stake in the nation’s biggest cable-television operator, CNS.

TSU caucus whip Lai Chen-chang (賴振昌) yesterday told a news conference that Far EasTone is a corporation with close ties to the Chinese Nationalist Party (KMT) as well as Beijing, and that its merger with CNS — the largest provider of cable television in Taiwan — is a fundamental threat to the freedom of the press and Taiwan’s sovereignty.

Far EasTone’s planned acquisition of CNS is disturbing, Lai said, adding that it is a ploy by the telecom to bypass Article 19 of the Radio and Television Act (廣播電視法), which prohibits the ownership of telecoms by governments, political parties and the military.

Far EasTone is forbidden by the act to directly purchase telecoms’ stocks, because several branches of the Taiwanese government, including the Ministry of Finance and the state-owned Bank of Taiwan, own about 2.9 percent of Far EasTone.

Lai criticized the deal as tantamount to “inviting a wolf into our home.”

According to publicly available information, Far EasTone paid NT$17.12 billion (US$533.67 million) to purchase CNS debts worth NT$48 billion, with the difference paid for by MSPE.

Ten percent of MSPE is owned by China Investment Corp, a sovereign wealth fund that manages Beijing’s financial holdings, Lai said, adding that the infusion of capital investment from entities owned by Chinese sovereign funds would result in communist control of Taiwan’s media.

TSU Legislator Yeh Chin-ling (葉津玲) said that, in addition to investments from the Taiwanese government, Far Eastern Group, which owns Far EasTone, has deep ties with the KMT established through its subsidiary that launched joint ventures with the KMT in biotech, chemicals and construction.

Yeh added that in the 2008 and 2012 presidential elections, Far Eastern Corp CEO Douglas Hsu (許旭東) made campaign donations to President Ma Ying-jeou (馬英九) totaling NT$93 million.

The TSU caucus urged the NCC to investigate the legality of Far EasTone’s actions in purchasing debt instead of stock, and the source of its funding.

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