CEPD Minister Liu: Why Did NDF Waive Its Rights in Yu Chang Investment Case Twice?

 CEPD Minister Liu: Why Did NDF Waive Its Rights in Yu Chang Investment Case Twice?

                       Source: Taipei newspapers    December 27, 2012

In a press conference held yesterday, Christina Liu (劉憶如), Minister of the Council for Economic Planning and Development (CEPD), showed four copies of official documents and raised three other points of suspicion in the Yu Chang case involving DPP Presidential candidate Tsai Ing-wen and her family. Liu pointed out that it was unreasonable for the National Development Fund (NDF) to waive its rights twice in the Yu Chang investment case. Liu asked, “Why was it necessary for David Ho (何大一) and Chen Lan-bo (陳良博), both academicians of the Academia Sinica, to serve as board members concurrently at the TaiMed Biotech Venture Capital Company and the Yu Chang Biologics Co.? Were there no other experts in the biotech field in Taiwan?”      

The DPP argued yesterday that the NDP had also invested in Taiwan Semiconductor Manufacturing Company (TSMC) and Adimmune Corporation. The chairmen of these two companies, Morris Chang (張忠謀) and Chan Chi-shean (詹啟賢), had smaller stakes in the companies than the NDF, yet they were still elected chairmen.  

In response, Liu said, “Chang and Chan’s professionalism in the semiconductor and biotech industries, respectively, are something that Tsai Ing-wen can never draw a parallel to in the biotech field.”     

Liu added, “Based on the principle of administrative neutrality and from the standpoint of the NDF, I have the responsibility to understand clearly the points of suspicion in the Yu Chang investment case. This has nothing to do with the elections.” In a statement issued yesterday, Liu called on Tsai, then chairman of the Yu Chang Biologics Co., in big bold type, to clarify the points of suspicion in the Yu Chang case, adding that she was waiting for Tsai’s answers.   

The three points of suspicion raised by CEPD Minister Liu in yesterday’s press conference are as follows:  

Question 1: Through what procedure was Tsai Ing-wen elected chairman of the Yu Chang Biologics Co.?

CEPD Minister Liu questioned, “Tsai Ing-wen, in her capacity as former Vice Premier, chaired a meeting on August 31^st, 2007, in which the plan was for the NDP to hold three seats on the board of directors and one seat as comptroller at the soon-to-be established Yu Chang Biologics Co. However, three days later (in the morning of September 3), Tsai convoked a meeting of the founders of the Yu Chang Biologics Co., electing four members of the board of directors and one comptroller, but the NDF was allotted only one seat on the board of directors and one comptroller (with then Academia Sinica President Wong Chi-huey (翁啟惠) serving as the gov’t-appointed member of the board of director and then CEPD Minister Ho Mei-yueh (何美玥) as the gov’t-appointed comptroller.) On the same day, in the afternoon, the Yu Chang Biologics Co. held its first board meeting, which elected Tsai chairman of the company.”

Liu said, “This was ‘Tsai Ing-wen betraying Tsai Ing-wen.’ This was also a blatant violation of the rules stipulated by the Legislative Yuan regulating government-held shares in the investment of private enterprises (in which the seats on the board of directors must be proportionate to capital investment.)” “Why did the NDF waive its rights at the time?” asked Liu.         

Question 2: Where did the comptrollers representing the NDF go?  

Liu questioned, “The NDF, which had only one seat on the board of directors and one comptroller, sent an official letter to Yu Chang Biologics Co. on September 5^th, asking Yu Chang to allot more seats on the board to the NDF. Yu Chang then convoked an extraordinary shareholders meeting on September 29^th, electing David Ho, Chen Lan-bo, and James Ho (何俊輝), then NDF executive deputy director, as members of the board representing government-held shares. However, then CEPD Minister Ho Mei-yueh was replaced as comptroller by Lin Chuan, former Finance Minister (2002-2006), in his capacity as a natural person.        

Liu pointed out, “This was the second time that the rights of the NDF were sacrificed. Although the comptroller did not have voting rights, the position enjoys the power to oversee the flow of funds.” “Why did Ho resign as comptroller?”   

The DPP argued, “Given the fact that David Ho and Chen Lan-bo were US citizens, time did not allow them to become board members on September 3^rd because of passport issues.” However, Liu questioned, “Was it absolutely necessary to ask US citizens to serve as board members? Couldn’t they find experts in Taiwan’s biotech field? Now, like the NDF itself, two NTU professors have been serving as board members representing government-held shares in the company.”  

Question 3: Are board members representing government-held shares exempted from conflict of interests?

Liu questioned, “According to the established precedents in NDF’s investment cases, board members representing government-held shares would do their best to avoid conflict of interests, i.e., not serving as board members at companies in an identical genre or field. However, David Ho and Chen Lan-bo, the two board members representing government-held shares appointed by the NDF, had already been elected as board members at the TaiMed Group as early as September 3^rd.”  

Liu questioned, “Were David Ho and Chan Lan-bo board members of the TaiMed Group on September 29^th? Were there no other experts in Taiwan? From the beginning to the end, there were only David Ho, Chen Lan-bo and Tsai Ing-wen on the board at these companies. How could we reasonably explain all this?” 

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