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Lawmakers, minister trade barbs over privatization of defense firm
Central News Agency
2014-07-30 10:18 PM
Taipei, July 30 (CNA) Lawmakers on the Legislature's Economics Committee Wednesday urged state-owned Aerospace Industrial Development Corp. (AIDC) not to go ahead with a privatization plan before a bill governing the company's establishment clears the legislative floor. The Economics Ministry-owned AIDC, which developed Taiwan's Indigenous Defense Fighter, announced it will begin inviting bids for the sales of its assets Wednesday, leaving lawmakers and the Economics Ministry with differing views on what the next step should be. Chang Chia-juch, Minister of Economic Affairs, said in a briefing to the legislative committee that AIDC plans to complete its privatization by the end of this year by listing on the Taiwan Stock Exchange. Under the plan, the government will initially hold a 46 percent stake in the company and eventually keep a stake of at least 36 percent to maintain stable operations. The company held an explanatory meeting on July 22 to announce its listing plan, and Chang said his ministry supports the plan based on future development trends for the aerospace industry. Several lawmakers from the opposition Democratic Progressive Party (DPP) saw differently. They demanded the Economics Ministry follow resolutions previously made by the Legislature to let the company start trading shares only after its plan has received legislative approval. DPP Legislator Su Chen-ching accused the ministry and AIDC of seeking to hand profits to large business conglomerates by selling state-owned assets at low prices. The Legislative Yuan passed a resolution back on June 6, 2001, during a review of AIDC's budget, demanding the company does not trade shares without going through the Legislature first. That was followed with another resolution on May 30, 2003, demanding AIDC give a report to the Legislature, including a concrete plan and timetable for the company's privatization, before it is allowed to begin the process. DPP Legislator Lin Tai-hua, chair of the Economics Committee, said after gathering lawmakers' opinions, they believe AIDC should suspend transferring of shares and the privatization process, including asset auctions and initial public offerings, effective Wednesday. Chang however countered that an amendment to the Act Governing Establishment of Aerospace Industrial Development Corporation has been submitted to the Legislative Yuan but lawmakers have not dealt with it. Citing the regulations of the Act, Chang said AIDC was meant to be transformed into a private company three years and six months after its establishment. Moreover, he pointed to relevant regulations on privatization, which state companies can apply for Executive Yuan approval to go private when the necessity arises, including meeting economic policies or market situations, and the transformation is not subject to restrictions under the Budget Act. Chang said the Economics Ministry respects the Legislature's resolutions but denied having violated any regulations in respect to AIDC's privatization plan. Chang also assured lawmakers that investors from China and Hong Kong will be prohibited from taking part in the transfer of shares in the company. (Huang Chiao-wen, Wen Kuei-hsiang and Evelyn Kao)
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