Gov’t watchdog passes proposal to put corrective measures on Cabinet

By Katherine Wei, The China Post

TAIPEI, Taiwan — The Control Yuan yesterday approved a proposal for the Executive Yuan to implement “corrective measures” in response to the Yu Chang controversy, which centered on former Democratic Progressive Party Chairwoman Tsai Ing-wen’s (蔡英文) improper role in the formation of a biotechnology firm. TaiMed Biologics Co. (宇昌生技公司) was co-founded and chaired briefly by Tsai in 2006. She was alleged to have pressed for government earmarks benefiting her company while serving as vice premier of the R.O.C.

After completing its probe into the case, the Control Yuan announced its decision that both the Executive Yuan and the Council for Economic Planning and Development (CEPD) should be subjected to corrective measures to improve the operations of both administrative organs. The Kuomintang accused Tsai of making a profit of over NT$10 million from stock options when she was chosen as the company’s chairman shortly after stepping down from her deputy seat, and said that she had violated the “revolving door” clause of the “Civil Servant Services Act” (公務員服務法), which bans civil servants from accepting key positions in companies that directly benefit from their links in government.

Although the Executive Yuan had announced in 2007 that it would use the National Development Fund (NDF, 國發基金) to obtain a 40-percent stake in biotech startup TaiMed, the government watchdog said yesterday that the Executive Yuan and the CEPD had been neglectful and did not conduct a thorough review before approving the use of funds from the NDF.

The Control Yuan laid blame with the Executive Yuan and the CEPD in conducting an approval process that was too hasty and “made serious mistakes, as there was information missing from the NDF-related documents.” According to the declassified documents, then-Premier Su Tseng-chang (蘇貞昌), along with Tsai, had endorsed the first document — dated Feb. 9, 2007 — in registering Taimed. Only Tsai and Ho Mei-yueh (何美玥), chairwoman of the CEPD under the then DPP-controlled administration, signed the second document, which also included a clause that the new joint venture would be named the TaiMed Group (later renamed TaiMed Biologics Co.) After the documents were declassified, it was revealed that the investment sums of the two signed papers were different, with the second one much higher than the first. Tsai was initially cleared of wrongdoing when the Special Investigation Division (SID) finished its investigation in August, 2012. The SID stated that the competent government authority regarding biotech companies is the Ministry of Economic Affairs (MOEA). As Tsai did not serve as part of the MOEA, she was found not to have violated the law, and there was no evidence found to support allegations that Tsai pressed the NDF to invest in the biotech firm. However, the Control Yuan stated that Tsai had obviously overstepped her position when she went against Su’s original orders. “Tsai should have forwarded the second document to Su, who was premier at the time, and she approved it despite a significant difference between the sums of investment listed on the two documents.”