The Taishan Co. Mode Is Filled with Fatal Attractiveness of Corruption

  The Taishan Co. Mode Is Filled with Fatal Attractiveness of Corruption

China Times Editorial (Taipei, Taiwan)

August 14, 2018

 Translation of an Excerpt

The KMT legislative caucus recently lambasted with artillery fire the Taishan Investment Management Consultancy Corporation, believing that it was a "financial edition of the Taiwan Goal scandal” and petitioned the Control Yuan to conduct an investigation; Control Yuan members Chen Ching-tsai et al. requested to conduct the investigation on their own initiative. However, the National Development Council under the Cabinet and Taishan Consultancy issued statements in succession, both denying any illegalities. Following in-depth investigative reporting by the media, it may be ascertained that the KMT caucus’ criticism could be considered “proper and balanced”; although it had not found “offenses,” the Tsai government deliberately turned government funds into a private sector business, attempting to evade parliamentary oversight, which would ignite serious problems in governance. What’s more, the "Taishan mode" is being expanded, and the risk in governance would keep expanding.

Taishan in status is a private sector company; the National Development Fund under the Cabinet contributed NT$50 million, or 39.68% of the capitalization. Another shareholder is the Bank of Taiwan, a 100% state-owned bank, only contributed NT$1 million, or less than 1% of the capitalization. In accordance with the law, as long as the government's equity does not constitute more than 50%, the company is in law defined as a private sector company, with no need to be constrained or be placed under parliamentary oversight according to pertinent government laws and regulations governing state-owned enterprises. The problem is another of Taishan’s  shareholders, and the largest shareholder, is the "Innovative Industry Technology Transfer Corporation" ( a subsidiary under the Industrial Technology Research Institute (ITRI), but structured as a private-sector company) which contributed NT$75 million, or nearly 60% of the capitalization, while the chairman of this company is concurrently the chairman of ITRI. A 100% substantively state-owned company is not subject to parliamentary oversight; is this not an artfully designed loophole?

Viewed from personnel appointments, the Tsai government uses public funds to set up a corporation, but entirely handed to a group of heavy Green partisan colors, lacking professionalism, while refusing to place it under parliamentary oversight. The worst approach is that if Taishan Co. truly excels in professionalism, with talents, with ideas, and professionalism, then it is alright to raise capitalization from private sector enterprises, but in reality most of its start-up funds came from state-owned banks. Government funds first contributed to set up Taishan Co., and then drew money from state-owned banks, while entirely exempt from parliamentary oversight; taxpayers (and investing state-owned banks) can only watch the taxpayers’ hard-earned money squandered by the Green camp before their eyes, being difficult to pursue accountability without parliamentary oversight.

To enhance investment and boost the economy, what the government should do is to improve the investment environment and relax laws and regulations, leaving the rest to the decisions of private sector enterprises. Now, on the contrary, the private sector harbors profound misgivings vis-à-vis the investment environment (especially with regard to the issue of power shortages), leading to dwindling investments, while the government, on the other hand, uses state funds to set up various types of corporations. It cannot truly gear up investments, but has rather created a hotbed for corruption.

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