The Economic Democracy Union think tank yesterday called for swift amendments to the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals (華僑及外國人投資證券管理辦法) to prevent economic espionage in Taiwan by Chinese corporations.
Think tank convener Lai Chung-chiang (賴中強) said changes were needed to require foreign investors to sign an affidavit that they are not backed by Chinese capital.
They should face perjury and forgery charges if it is found that they receive Chinese funding, Lai said.
Current regulations undermine the effort to prevent Beijing from forcing unification on Taiwan via economic means, as investors that meet the requirements are exempt from review by the Ministry of Economic Affairs’ Investment Commission, Lai said.
A foreign investor is not required to disclose their identity, as the Taiwanese financial institute that handles their operations here is the name attached to the funds, he said.
The identity of the actual investor might not be known and yet they are allowed to vote at shareholders’ meetings, which is an avenue through which they might intervene in a company’s management, Lai said.
Chinese corporations have been gradually creeping into Taiwan under the guise of legitimate foreign investors, including from Hong Kong, and that these “fronts” for Beijing are responsible for the theft of commercial secrets, as well as personal information, he said.
Such entities control parts of the industrial supply chain in Taiwan, he said.
It is absurd that the Financial Supervisory Commission has not closed this loophole, but after being asked about the issue by a legislator’s office, the commission said that it had no intention of amending the regulations, he added.
Prior to 1995, there was a clearly stipulated cap of 5 percent on investments by foreign individuals and a 10 percent cap on how much a foreign entity could hold of a Taiwanese firm’s stock, Lai said.
However, those limits were abolished in 1995 by the Ministry of Finance’s Securities and Futures Institute, and no replacements regulations were introduced, he said.
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