Tsai became chairwoman of Yu Chang Biologics Company in 2007, months after she left the position of vice premier in the DPP administration. Critics alleged she broke the revolving-door clause barring government officials from holding top positions at companies within three years of their resignation if they had had dealings with it during the five years up to their leaving government.The Taipei Times has a very detailed discussion of what happened. Tsai approved funds for a biotech firm which, after stepping down from the Premiership, she became Chairman of. The DPP explained that actually Tsai didn't violate the clause in the law, and rejected accusations by the KMT that Tsai had made gazillions from the firm. Apparently things couldn't have been too bad, because the KMT Administration of President Ma also invested in the firm, and the government made a good return on its investment to boot.
Tsai said she had actually helped the government make NT$1 billion (US$33 million) within three years. Neither she nor her relatives had invested in the company and made any huge profits, she told a news conference in Tainan Friday.
Her part in the Yu Chang launch had been investigated already, so the recent spate of accusations was just the ruling Kuomintang trying to damage her reputation one month ahead of the presidential election, she said.
This is, I am told, an accusation that the KMT has tried before in elections Tsai was involved with. In other words, it was DOA when it was made a couple of years ago. There is a second accusation with this one which may also pop up one of these days. Lookin' forward to it....
Thing is, Tsai became Chair of TaiMed in 2007. Four years ago. Her move into the post was open and public. At the time the government was hoping to encourage the biotech industry. Here's a 2009 Taiwan Panorama piece:
Then, in July 2007, the Legislative Yuan passed the Act for the Development of Biotech and New Pharmaceuticals Industry. Genentech announced that it was acquiring Tanox and its patents, including that to TNX-355, the following month. The outlook for the domestic biotech and new pharmaceuticals industries looked bright, and there were constant rumors that Genentech was planning a joint venture with a Taiwanese firm.See any hint of shenanigans there? Wait a sec.... Check out this Commonwealth magazine piece, which celebrates the close coordination of the biotech industry and government as new regulatory frameworks were coming into existence to permit expansion of the industry in Taiwan and remove barriers to cooperation. Tsai herself "played a critical role" in getting the regulatory and legal framework changed. The laws allowing business-government exchanges were loosened, for both scientists and other forms of personnel. A month later Commonwealth notes:
On the evening of September 12, 2007, the National Development Fund announced that it was taking a 40% stake in TaiMed Biologics, a company that would be formed the following day. TaiMed named former vice premier Tsai Ing-wen its first chair and TNX-355, acquired from Genentech for US$100 million, its first product. Ho, Academia Sinica president Wong Chi-huey, and Patrick Yang, Genentech's Taiwanese executive vice president, were all instrumental to the deal that got development of TNX-355 going again.
Lastly, they brought onboard expert negotiator Tsai Ying-wen as chairperson of the board.Commonwealth specifically lauds Tsai for her integrity and impartiality which it says she is renowned for!
Though she had no previous experience in the biotech industry, Ho says that Tsai possesses a special ability when it comes to the power of persuasion.
The team sent Tsai to the United States for a two-week “crash course” in August. With Chen Lan-bo acting as host, Tsai paid visits to important biotech businesses, educational institutes and Wall Street as well. After meeting with Tsai at that time, Chen relates, a few of his Wall Street friends who had been unwilling to help out in the past all pledged to spare no effort in assisting Taiwan.
Tsai's talents as a communicator and harmonizer were applied to great effect during the final stage of talks with Genentech. Chen says that for many things, “she takes a deeper view than the American lawyers and is able to make the details even clearer than the American biotech companies.”
Participating scientists maintain that the integrity and impartiality for which Tsai is renowned are a requirement for doing business in the biotech sector. “I think this is a business to stay for the long term, and integrity is a very important quality for a successful business in the long term,” says Ho, adding, “Short term, I think you could skip on the integrity... and then forget your vision. That's possible. But we are not doing this.”
Finally, in 2008 when Tsai was running for DPP Chair, the China Times attempted to make an issue of Tsai having a conflict of interest since she had become Chair of the DPP while being Chair of TaiMed. This attempt died stillborn. More importantly, the China Times didn't make any concrete accusation that Tsai had any conflict of interest in her position as premier or of violations of the Civil Service Act, because there were none that could be made! If Tsai had really done anything identifiably wrong, she'd have been enthusiastically roasted by the KMT and its toadies as another example of "Chen Administration corruption." But the reality is quite the opposite: everyone seemed quite happy that TaiMed had secured the services of the talented Tsai Ing-wen.
In other words, this has every appearance of being a smear, pure and simple.
Oh yeah, the "Ho" in the article above, who is the firm's scientific founder? That is David Ho, one of the world's top scientists, who invented the drug cocktail approach for halting AIDS (more on it in this 2009 article). According to all sides, he was one of the scientists who brought her into the firm.
Fortunately, the KMT offered us some comic relief on the mudslinging front: the revelation that nine years ago the wife of DPP VP candidate Su Jia-chyuan had attended a party where there were strippers when he was the Pingtung County Chief and she an official in the land office. O the horror! Su promptly apologized for the sake of public morality as irony meters all over Taiwan exploded, given the longstanding involvement of A Certain Political Party with organized crime and prostitution (and political killings, martial law, etc). Not to mention that plenty of politicians from all parties have visited houses of ill fame..... given how modern it makes his wife look, this accusation will no doubt help Su.
Only a few weeks left, and it appears that Tsai has the edge on Ma. The nastiness is only beginning.....
UPDATED: Taiwan Echo observes in the comments:
Tsai in her press conference said that she didn't gain unusual/out-of-ordinary profits from her investment.UPDATE II: Lots of great comments. SY notes:
When reporting that, NowNews twisted it into that: "I didn't gain profit from that investment."
It then used by the KMT to accuse her of lying.
My article (in chinese) on how Tsai's word is twisted:
NowNews, previously "behaves" like non-partisan, reveals that it hardly is. The journalist who twisted Tsai's word is no one else but NowNew's News Center Director as well as Deputy Editor.
That simple twist helps to lock the blue extremists in a mentality of hatred against Tsai.
My understanding of the matter is as follows:Read all the comments, some good perspectives. I suspect Taiwan Echo is right -- once word gets around, this will hurt the Ma campaign in the end.
1. At the time, much was discussed about how to secure more technologies for Taiwan to face the Standort competition from other Asian nations. Bio tech was identified as one of the desirables.
2. The Taiwanese law makers set the rule that the government could only contribute to less than 40% of the total venture capital.
3. At the time, bio tech was seen (still is seen) as high risk and only profitable over long term if at all successful. Most Taiwanese venture capitalists were not willing to participate. Therefore, there was not enough private venture capital to get the project going.
4. The key scientists, via the help of the Nobel laureate Yuan Tseh Lee and others, persuaded Ms. Tsai to get involved. She contributed NT$220 millions to get the total private capital contribution to the reuqired 60% of all to get the proejct started. She was also asked to act as the CEO with the primary task to negotiate with Genetech due to her international negotiation experiences (key word: GATT/WTO.)
5. At the time, both Japan and South Korea were competing to gain access to the technology. Therefore, the project file was classified.
6. Once the negotiation went through and the business got substantially going, other private capitalists became willing to participate. When Ms. Tsai had achieved her goal (to kick start the venture), she pulled herself out of the project. She was not salarized for her work as CEO. She got her initial investment (NT$220 million) back with NT$10 million (US$333K) as interest payment (which worked out to be about 3.5% annualized; a pretty humble earning, given the fact that the company was doing well and has been since.)
To my eyes, the Yu Chang project is a huge asset, not a liability, to Ms. Tsai. I'd mark it clearly in my resume. Ms. Tsai is too humble to brag.
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