Thursday, February 12, 2009

Hejian in a New Light

News has come out that casts the prosecution of UMC executives over investments in Hejian, UMC's fab in Mainland China (link here), in a new light. Apparently, the Chen Shuibian administration allegedly tried to hit up Bob Tsao for political contributions and threatened to influence the outcome of the ongoing prosecution over the investment in Hejian if Tsao did not cough up the money. Essentially, the government's prosecution case claimed that UMC had violated Taiwan's investment laws by investing in Hejian, which is located Mainland China. What was strange about the prosecution is that it started in 2004 long after UMC's involvement in Hejian was publicly and widely reported, such as in an excellent article in WSJ on April 1 of 2002 (p. A8) by Jason Dean and Terho Uimonen. Given these reports, the Taiwanese government could not plausibly have not heard about UMC's reported investment in Hejian, but the government waited two years before bringing a case. With these new reports about demands for political contributions, the delay may be explained by the fact that Chen's administration never real wanted to prosecute as much as shakedown UMC.

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