The tainted oil scandal involving Ting Hsin International Group (頂新國際集團) has not only dealt a heavy blow to the food industry, it has also threatened food safety and public health. Since the scandal broke, continued incompetence from the relevant government agencies has led to an active grassroots campaign to “shut down” Ting Hsin.
The Chinese Nationalist Party (KMT) government is focusing on the upcoming nine-in-one elections, so to minimize public unrest, it has put pressure on the company by forcing members of the Wei (魏) family, which runs Ting Hsin, to relinquish posts at Taipei Financial Center Corp (TFCC, 台北金融大樓公司), the firm which operates Taipei 101, and has asked that government-invested banks tighten their lending to the conglomerate.
While food safety has been the focus throughout the process of investigating the Wei family, the nation’s problem with financial controls has also come to light.
Generally speaking, Taiwanese financial controls are amazingly strict. In August, when a technology firm was accused of illegal financial dealings for issuing virtual currency, its chairman protested, saying that outside of Taiwan, such developments are known as “innovation.” In September, Apple launched its iPhone 6 smartphone, which includes a function called “Apple Pay.” Because it touches upon financial services, the function is currently unavailable in the nation. In addition, multiple layers of financial regulations mean that Taiwan falls far behind the Chinese market in the development of third-party payment solutions. All this results from Taiwan’s seemingly powerful financial supervisory agencies and mechanisms.
The revelation that Ting Hsin and the Wei family had such easy access to funds that enabled them to acquire companies and engage in real-estate speculation is a slap in the face of these financial supervisory agencies. The harder these agencies go after the Wei family now, the more obvious it becomes that their previous enforcement standards were inconsistent and that they neglected their duties.
Leave aside Minister of Finance Chang Sheng-ford (張盛和) and Financial Supervisory Commission Chairman William Tseng (曾銘宗), who both have a very ambiguous view of things, and focus instead on central bank Governor Perng Fai-nan (彭淮南), who cleared things up during a legislative question-and-answer session, directly criticizing the Wei family for returning to Taiwan empty-handed and then borrowing money for their real-estate speculation.
If Perng’s criticism is justified, why did the central bank, which is charged with the supervision of banks, not take action against Ting Hsin in the past, when the bank was directing all its efforts toward fighting real-estate speculation? Could it be that if the group had not been linked to tainted oil, its real-estate speculation would be acceptable?
The supervisory authorities’ actions in this matter — which contradict their behavior under normal circumstances — undoubtedly constitute the main reason why the rumor that President Ma Ying-jeou (馬英九) has been protecting Ting Hsin refuses to die down.
The nation has always prided itself in having a liberal and sound financial market, while being determined to become an Asian financial center. One does not have to be a financial expert to see what has become of these ambitions.
How has it come to this? Perhaps part of the explanation lies in the double standards of the financial supervisory agencies, which have been highlighted by the Ting Hsin scandal.
Lin Hsuan-chu is an associate professor in National Cheng Kung University’s accountancy department.
Translated by Perry Svensson
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