Arms-deal agency will be shut down, new defence chief vows

PUBLISHED : Tuesday, 26 February, 2008, 12:00am
UPDATED : Tuesday, 26 February, 2008, 12:00am

Taiwan's new defence minister, Michael Tsai Ming-hsien, vowed yesterday to disband a controversial arms-deal agency that led to the resignation of his predecessor, General Lee Tien-yu.

'I believe we will be cautiously and effectively handling the issue, and in the past two days Premier Chang [Chun-hsiung] has precisely instructed that Taiwan Goal Company will be disbanded in the near term in line with set legal procedures,' said Mr Tsai, a former vice-defence minister.

He was referring to the government's formation of the arms-deal company as a private firm last month without consulting the legislature, dominated by the opposition Kuomintang.

Forty-five per cent of Taiwan Goal's initial capital of NT$200 million (HK$49.7 million) was supposed to have come from the Defence Ministry, but it would have been denied control of the lucrative firm.

Under the plan, a government-controlled steel firm would have taken a 25 per cent stake in the firm, while a government-controlled telecommunications company and a glass company affiliated with the Ministry of Economic Affairs would have each taken 15 per cent stakes in the project.

News reports said Taiwan Goal would handle the government's NT$150 billion purchase of PC-3 Orion anti-submarine aircraft, attack helicopters and transport planes from the US.

Opposition lawmakers accused the ruling Democratic Progressive Party of trying to channel funds into its own pocket before President Chen Shui-bian's second four-year term ends on May 20.

The opposition also accused General Lee of failing to look after the Defence Ministry's interests by consenting to the establishment of the private firm, despite assurances by the DPP government that everything was above board. General Lee tendered his resignation on Saturday.

Mr Tsai, the first civilian defence minister appointed by the Chen government, said he would do all he could to safeguard the ministry's interests.

He also vowed to uphold his predecessor's undertaking that most military personnel would be able to vote during the March 22 presidential election. The KMT has demanded that the military not restrict servicemen from voting by using the excuse that they must stand guard during the election period to prevent any surprise attack from the mainland.

Many servicemen are reported to be supporters of the KMT.