Mon, Dec 03, 2018 - Page 3 News List

Asset committee says KMT profited from forex manipulation in 1950s

By Chen Yu-fu and William Hetherington  /  Staff reporter, with staff writer

The Chinese Nationalist Party (KMT) profited from manipulating the foreign-exchange market during the 1950s, the Ill-gotten Party Assets Settlement Committee has said, citing evidence it has collected.

It has also found evidence that the nation’s largest light bulb factory at the time was run by the KMT, the committee said.

The KMT became one of the wealthiest political parties in the world through party-run commercial enterprises, which began with establishing a monopoly on utilities and the production of daily necessities, the committee said.

Proceeds from large national companies were divided among high-level party officials, while those from smaller regional companies were divided among local party members, the committee said, adding that there were several examples of this in the form of smaller gas companies using the character hsin (欣) in their names.

That the KMT profited from manipulating the foreign-exchange market was first revealed in an article published in the Free China Journal (自由中國) in March 1958, the committee said.

Vendors who wanted to import apples at the time needed to obtain special approval by going through then KMT’s Central Finance Committee, which was charging three times the market exchange rate for US dollars, it said.

Under KMT policy at the time, private companies paid at the higher exchange rate while party-owned companies paid market rates and did not need to go through any application procedures to exchange money, it added.

The light bulb factory was also discussed in the Free China Journal, which described public complaints over the low quality of the bulbs, the assets committee said.

Vendors could not import better-quality bulbs, as the KMT did not approve their applications and if they did the cost would be prohibitively high, it added.

The KMT also profited from 18 Japanese movie theaters that were taken over by the party following World War II, it said, adding that the most profitable was directly overseen by KMT-run Central Motion Pictures Corp (CMPC, 中影公司).

Japanese broadcasting stations were taken over by the KMT, which in 1946 placed their operations under the control of the Broadcasting Corp of China (BCC, 中國廣播公司), the committee added.

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