Fears China Airlines to be sold off spread with appointment

The China Post staff

The government has replaced the head of a foundation that controls China Airlines, prompting fears that it is the first step to sell off the firm to its civilian rival, EVA Airways, whose head has strong ties with President Chen Shui-bian. Tsay Jaw-yang replaced Chang Chun-yen as head of the China Aviation Development Foundation (CADF), a government proxy that holds over 71 percent of CAL stake. Chang, also incumbent head of National Chiao Tung University, quit as he wanted to concentrate on his school management work, according to Transportation and Communications Minister Yeh Chu-lan. But Chang, who assumed the top foundation post in June last year, on Tuesday showed no intention of resigning when he was asked of the possibility of losing the job. Chang yesterday said he was only concerned with technological development in Taiwan, and had heard nothing about his successor being chosen because of his connection with former President Lee Teng-hui. Rumors spread that Tsay, a former transport minister who stepped down over the fatal CAL crash near Chiang Kai-shek International Airport in 1998, won the foundation leadership because of Lee’s recommendation. An anonymous letter has been sent to the local media, alleging that President Chen Shui-bian accepted Lee’s recommendation in return for his predecessor’s support of the DPP in the year-end elections. The opposition parties also allege that the replacement was an attempt to let the DPP control the CADF, and then sell off CAL to the Evergreen Group, which owns EVA Airways. They alleged the recent appointment of Cheng Shen-chih, son-in-law of Evergreen head Chang Yung-fa, to head the state-run Chiao Tung Bank testified to President Chen Shui-bian’s collusion with the business tycoon. Chen used to be Evergreen’s legal counselor, according to Kuomintang Legislator Lee Cheng-chong. But Yeh denied the accusations, saying the government would not sell off CAL to Evergreen. She also defended Tsay’s appointment, saying it was not a DPP attempt to control the CADF, because her predecessor was not a member of the ruling party. Tsay, also an incumbent national policy adviser, said the CAL plan to release its shares to the public, already approved by former transport Minister Lin Fong-cheng, would be a fair competition. He added he had no timetable for the privatization plan.

He also denied that he would recruit Evergreen executives to CAL, stressing competent employees should stay put to facilitate management of the state-run airline. Presidential Secretary-General Chen Che-nan, who was alleged to be the courier between Chen and Lee over the Tsay appointment, denied any involvement. The top presidential aide said Tsay, with his administrative experience in the government, was an ideal choice for the CADF post. The CAL said it welcomed Tsay’s appointment, but its labor union threatened strong protest if Evergreen was to take over the airline. Li Chao-ping, head of the labor union, said they remained neutral over the CADF shakeup, but it must not affect the job rights of the CAL employees.