Rejecting allegations that he had dipped his hands into the company’s coffers, Kuo Ching-chiang (郭清江), the former chairman and chief executive officer of Sino Swearingen Aircraft Corp (SSAC), said he had created invaluable “goodwill” with the lossmaking Taiwan-US joint venture.
During an interview with the Taipei Times at the China University of Technology in Taipei on Saturday, Kuo said the company was already operating in the red when he took over nearly three years ago.
SSAC reported a deficit of US$485.56 million as of September 2005 when he assumed the chairmanship, said Kuo, who has been barred from leaving the country as prosecutors conduct an investigation into allegations of embezzlement and corruption.
“I cannot assume responsibility for a problem that I didn’t make,” said Kuo, 66, who has a doctorate in aeronautics and astronautics from the Massachusetts Institute of Technology and worked at Rockwell and Boeing for some 20 years.
The Taiwanese government invested about US$530.2 million in SSAC between March 1995 and September 2005. The government injected another US$116 million in the company during Kuo’s term between September 2005 and June last year. As of the end of Kuo’s tenure, the government had invested a total of US$646.2 million in SSAC, in which the Taiwanese government holds a more than 90 percent share.
Before the March 22 presidential election, opposition lawmakers accused Kuo of embezzling US$600 million (NT$20 billion) from SSAC. The Special Investigation Panel under the Supreme Prosecutors’ Office are currently investigating the case.
Kuo said SSAC had assets of US$44.62 million when he took over in September 2005, citing financial documents provided by SSAC chief financial officer Kelly Simmons. When he tendered his resignation in June last year, the company’s total assets had nearly doubled to US$86.76 million, documents showed.
“Reports by Chinese-language newspapers that SSAC had US$300 million in the bank when I took over are simply ridiculous. What are they talking about? I don’t understand,” he said.
Kuo said that the company’s balance sheet showed a US$90 million debt for the first time during his tenure, but that was mainly from a loan by major shareholders to SSAC as part of their US$116 million investment (including US$38 million in cash and US$78 million in loans).
Kuo said he should not be blamed for this debt because “it was the shareholders’ decision to loan the company money, not mine.”
Kuo has been credited with helping SSAC obtain a US Federal Aviation Administration Type Certificate for its high-performance SJ30-2 jet in 2005 and a Certification of Airworthiness for two production airplanes last year.
“All these are firsts in the past 40 four years for a new company with a new type of business jet,” he said.
Kuo said he had showed the company’s financial documents to prosecutors and demanded justice if the allegations were found to be a political plot by opposition lawmakers to damage his reputation and harm the Democratic Progressive Party government.
Kuo said the Ministry of Economic Affairs was aware he was innocent.
“Most of the media reports are either false or distorted. But, under the pressure of lawmakers, the ministry still forwarded my case to the Special Investigation Panel,” he said.
SSAC has practically ceased its manufacturing operation and is on the brink of bankruptcy because of funding problems. The government has only injected US$8.18 million into the company since July last year to maintain the company’s daily administrative operations. It had also suspended a deal to sell an 80 percent stake to a venture capital firm from the United Arab Emirates (UAE) for US$150 million in February, after opposition lawmakers accused it of trying to sell off SSAC at too low a price.
Kuo said the UAE deal is valuable to Taiwan because, based on his understanding, the investor was willing not only to shoulder the US$85 million loan but also to pay royalty fees to shareholders on future new aircraft sales.
“The UAE investment is the only alternative that would allow SSAC to stay in business as the government has stopped funding it and there are no other interested buyers,” Kuo said.
If the deal collapses and the company has to file for bankruptcy protection, SSAC would face litigation risks and that could damage Taiwan’s reputation, he said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$7.5 billion into its US subsidiary, the Department of Investment Review said in a statement. The department approved TSMC’s application of investing in TSMC Arizona Corp, which is engaged in the manufacturing, sales, testing and design of IC and other semiconductor devices, it said. The latest capital injection follows a US$5 billion investment for TSMC Arizona approved in June. The chipmaker has broken ground on two advanced fabs in Arizona with aggregated investments approved by the department totaling US$24 billion thus far. According to TSMC, the first Arizona
The lethal hack of Hezbollah’s Asian-branded pagers and walkie-talkies has sparked an intense search for the devices’ path, revealing a murky market for older technologies where buyers might have few assurances about what they are getting. While supply chains and distribution channels for higher-margin and newer products are tightly managed, that is not the case for older electronics from Asia where counterfeiting, surplus inventories and complex contract manufacturing deals can sometimes make it impossible to identify the source of a product, analysts and consultants say. The response from the companies at the center of the booby-trapped gadgets that killed 37
FRIENDLY TAKEOVER: While Qualcomm Inc’s proposal to buy some or all of Intel raises the prospect of other competitors, Broadcom Inc is staying on the sidelines Qualcomm Inc has approached Intel Corp to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever merger and acquisition deals. California-based Qualcomm proposed a friendly takeover for Intel in recent days, said the sources, who asked not to be identified discussing confidential information. The proposal is for all of the chipmaker, although Qualcomm has not ruled out buying some parts of Intel and selling off others. It is uncertain whether the initial approach would lead to an agreement and any deal is likely to come under close antitrust scrutiny
SECURITY CONCERNS: The proposed ban on Chinese autonomous vehicle software and hardware would go into effect with the 2027 and 2030 model years respectively The US Department of Commerce today is expected to propose prohibiting Chinese software and hardware in connected and autonomous vehicles on US roads due to national security concerns, two sources said. US President Joe Biden’s administration has raised concerns about the collection of data by Chinese companies on US drivers and infrastructure as well as the potential foreign manipulation of vehicles connected to the Internet and navigation systems. The proposed regulation would ban the import and sale of vehicles from China with key communications or automated driving system software or hardware, said the two sources, who declined to be identified because the