TAIPEI (CNA) — Taipei Mayor Ko Wen-je (柯文哲) expressed respect on June 27 for a decision by the Investment Commission to reject Hong Kong-based Nan Hai Corp.’s bid for a Taipei Twin Towers project due to national security concerns.
Ko said the Taipei City government will decide how to deal with the matter depending on a response by Nan Hai Development Ltd., which, along with Malton Berhad of Malaysia, had qualified last December as the most favored bidders for the development of a huge complex dubbed Taipei Twin Towers near the Taipei Railway Station.
Prior to that, a public tender conducted by the Taipei Department of Rapid Transit Systems in December last year for the project had failed five times.
However, the Ministry of Economic Affairs’ (MOEA) Investment Commission on Wednesday rejected awarding the construction contract to Nan Hai and Malton Berhad, based on Article 7 of the Statute for Investment by Foreign Nationals, in light of the former’s close ties to China.
However, Ko said that Nan Hai was allowed to take part in the bidding because it was initially not deemed by the MOEA as a company backed by Chinese capital.
In addition, Nan Hai is a shareholder of Taiwan’s Sunny Bank, Ko noted, urging the Investment Commission to give an explanation for its decision.
In the absence of objective standards to define national security concerns, the commission’s rejection of the company’s bid could create uncertainty among foreign businesses seeking to invest in Taiwan and is not conducive to attracting foreign investment, Ko said.
He said the city government will handle the situation after Nan Hai makes a response, either by filing an administrative appeal or litigation. “But that could take a long time,” he added.
Nan Hai has been deemed a Chinese-funded enterprise because the financial statements of its parent company show that Nan Hai’s administrative center and most of its employees and business operations are in China, while more than half of the board members of its parent company who are responsible for business operations and execution are Chinese citizens, Investment Commission spokeswoman Yang Shu-ling (楊淑玲) told a media briefing in Taipei Wednesday.
She cited national security concerns behind the commission’s decision to reject the project to be awarded to a consortium with such close links to China because of the project’s proximity to the Taipei Railway Station, which is the hub of the mass rapid transit system, the railway, the high-speed railway, and the bus systems.
Yang also said the commission will review whether Nan Hai’s previous investment in Sunny Bank could cause national security concerns, although it has only a 3.04 percent stake in the bank and does not hold substantive control over corporate operations.
The commission also said that if Nan Hai disagrees with the decision, it could file an administrative appeal with the Executive Yuan within 30 days of the announcement of the decision.
Also Wednesday, lawyers representing Nan Hai argued that Article 7 of the Statute for Investment by Foreign Nationals does not apply to the project and that the commission’s rejection of Nan Hai’s bid could be in violation of the existing regulations.
By Chen Yi-hsuan, Wei Shu and Evelyn Kao