Wed, Oct 01, 2003 page10

• Government investments lose money, PFP charges

  • By Joyce Huang / STAFF REPORTER
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  Government investments in Taiwanese companies lost money to the tune of NT$60 billion last year, opposition lawmakers charged yesterday, accusing the government of mismanagement and misspending.

  But government officials rejected the accusations, saying that the funds are healthy and are now actually making money.

  At a press conference yesterday, People First Party (PFP) legislators singled out the Ministry of Finance for its poor management of government-owned funds, which lost NT$46.4 billion last year.

  "The government is a spendthrift, which used public money to strengthen its political and business ties at the expense of taxpayers," PFP Legislator Pang Chien-kuo (龐建國) said.

  Citing a central government budget report, PFP Legislator Norman Yin (殷乃平) said that the balance on the government funds was NT$48.9 billion in pre-tax earnings in 2001, but was pushed into the red with a negative worth of NT$12 billion last year.

  "A total of NT$60 billion was lost last year," Yin said.

  Yin singled out the Sino-Swearingen Aircraft Corp (華揚史威靈), saying that the Taiwan-US venture's pre-tax losses have reached NT$2 billion -- 200 times its working capital -- yet the government continued to inject cash into the company for diplomatic reasons.

  "The Democratic Progressive Party government has siphoned off Taiwanese people's hard-earned money to benefit certain American politicians," Yin said.

  He said that state-owned enterprises (SOEs) generated NT$241.5 billion in revenue last year, and it was wrong to blame those firms for the shortfall in the government's annual income.

  "The government funds -- and not the SOEs -- are the true money pit," he said.

  PFP Legislator Thomas Lee (李桐豪) said a lack of a proper monitoring mechanisms has led to the central government's skirting its responsibility for the poor management of its funds.

  Lee said the government was supposed to come up with reports that would review the government's money-losing investments while at the same time hammering out solutions to cut the losses.

  But so far, Lee charged, the government has offered no explanation for why it has continued to inject money into at least seven money-losing investments -- including Yamay International Development Corp (月眉開發), which runs the Mala Bay (馬拉灣) recreational theme park in Taichung County; the Taiwan Development & Trust Corp (台開信託) and the Bank of Overseas Chinese (華僑銀行).

  He also questioned whether it was appropriate for the government to entrust the International Commercial Bank of China (中國商銀), a subsidiary of Mega Financial Holdings Co (兆豐金控), with the management of government funds, saying this was clearly a conflict of interests.

  The PFP lawmakers yesterday urged the nation's judicial body to thoroughly investigate what they said was the mismanagement of the government's funds.

  In response, Mark Wei (魏寶生) the finance ministry's director-general, said yesterday that a big part of the loss was due to the government's strategic investments in five troubled financial institutions -- including Hua Nan Financial Holdings Co (華南金控) and the Chang Hwa Commercial Bank (彰化銀行).

  Those five institutions lost a total of NT$114.8 billion as a result of their aggressive writing off of bad loans -- which they had done in compliance with the government's reform efforts to restore health to the financial industry.

  "Aside from those five money-losing banks, the ministry's remaining investments were actually profitable, with NT$68.4 billion in earnings," Wei told a press conference yesterday afternoon.

  The steering committee for the NT$500 billion-worth Development Fund (開發基金) also rejected the opposition lawmakers' accusations, saying in a statement that the fund had replenished government coffers to the tune of NT$21.7 billion last year.
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