New Power Party (NPP) Executive Chairman Huang Kuo-chang (黃國昌) and Kaohsiung Medical University (KMU) alumni yesterday called for an investigation into a company stock sale by school board chairman Chen Chien-chih (陳建志) and his family that allegedly enabled the company and the buyer to evade at least NT$10 billion (US$323.21 million) in taxes in 2014.
Former Kaohsiung mayor and former KMU board chairman Chen Chi-chuan (陳啟川) in 1959 founded the Nanhexing company to manage his family’s land, which reportedly exceeded 39.6 hectares.
On Dec. 26, 2014, the company reportedly sold 58 percent of its shares to Hong Kong real-estate firm Asia Pacific Land Ltd (APL) for a profit of NT$12 billion, leaving the remaining 42 percent to several members of the Chen family and the Chen Chi-chuan Foundation for Culture and Education (陳啟川先生文教基金會).
Photo: Wang Yi-sung, Taipei Times
The stock purchase gave APL control of Nanhexing’s land without officially buying it, allowing the Hong Kong company to dodge NT$8.5 billion in taxes, including NT$6 billion in income tax, which it would have had to pay as a foreign real-estate investor, and NT$2.5 billion in gift tax, said Huang Kun-kuang (黃坤光), a former tax auditor for the Kaohsiung National Taxation Bureau.
Under the Land Act (土地法), land purchases by foreigners that might affect the economy must receive government approval, but APL evaded the regulation, he said, adding: “It just bewilders me that this is happening. What country in the world would allow foreign investors to hike up land prices and rip off its citizens?”
By transferring land ownership through a stock purchase, Nanhexing also allegedly dodged at least NT$1.5 billion in property transaction income tax, because it was only taxed on gains from securities transactions, he said.
The case not only uncovered possible issues with APL, but also points to larger concerns over other foreign investors controlling Taiwanese real estate in the same unsupervised manner, Huang Kuo-chang said.
“If other Chinese and Hong Kong investors can control Taiwanese land by becoming major shareholders of Taiwanese companies, as APL did, that could have a considerable effect on national security and work to promote land justice,” he added.
Since being informed of the alleged tax evasion by Huang Kun-kuang, the NPP legislator said that he has asked the Ministry of Finance to provide case documents, but his request has been denied due to confidentiality.
He urged the ministry to probe the case, adding that it should not “take it easy just because big corporations are involved.”
The KMU Alumni Association yesterday filed criminal charges against KMU members accusing them of graft and giving authorities false information.
The school has tried to change the registered school founder from Tu Tsung-ming (杜聰明) to Chen Chi-chuan and reportedly made the KMU hospital cover the school’s personnel expenses, association vice-president Lan Chuan-cheng (藍傳盛) said.
The association also filed criminal charges against the Ministry of Education for approving two board members who the association believed were unqualified.
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