Premier Tang Fei (
Tang made the remarks during a meeting with representatives of New Taiwan Alliance (
The news follows Monday's plan to double the Postal Savings Fund (郵政儲金) to NT$300 billion, and instructions to use the new capital to invest in blue chip companies in an attempt to further bolster the nation's traditional industries.
Appearing to reverse the recent policy aimed at bolstering traditional industries, Tang said yesterday that, "Traditional industries have to develop themselves ... the four government funds will not be able to revive traditional industries [through the stock market]."
Indicating that the days of government intervention in the lagging sector may be coming to an end, Tang emphasized that "the four government funds do not have to buy shares in traditional industries," but instead "traditional industries have to find ways to rescue themselves and not depend on the four government funds."
"Recently the Executive Yuan has been encouraging traditional industries to specialize, and many industrial groups have [done so by] investing in technical fields, which is a new development trend for the industry."
Demonstrating its resolve to prop-up non-traditional shares, the four government funds bought over NT$2 billion during stock market trading yesterday, with most of their investment limited to high-tech issues. Nevertheless, the TAIEX still dropped 174 points, closing at 7,610.
According to one market watcher, some firms shouldn't be rescued because the financial difficulties they face are too great.
"The government should treat traditional industries separately," said Chang Chung-ben (
Companies such as Ever Fortune Group (
According to Chang, what these companies have primarily been doing in recent years is speculating on real estate and the stock market, and therefore they should not be rescued with government funds.
"From the financial reports from these problematic companies, we discovered that there is a lot of misrepresentations and false accounting figures.
"Rebar Group (
"Rebar has used its capital to purchase shares from one of its subsidiaries by paying NT$107 a share, but the net-worth of the subsidiary was only NT$6 a share and the earnings per share was only NT$0.17 a share.
"Furthermore, the revenue that Rebar gained from the stock trading was listed as accounts receivable on securities trading, even though the trade never really took place. It's only a fictitious trade within the group itself.
"If this kind of company falls into financial difficulties, do you think the government should try to rescue it?"
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