The head of Taiwan’s United Microelectronics Corp (UMC), the world’s second largest contract chip maker, will challenge a government fine for making an unauthorized investment in China, a report said Thursday.
UMC chairman Robert Tsao was fined three million Taiwan dollars (95,500 US) by the Financial Supervisory Commission (FSC) earlier this month when he was found to have financial links with Shanghai-based HeJian Technology Co.
The FSC charged that Tsao had delayed reporting UMC’s connections with Hejian and a March UMC board meeting also relating to the Chinese firm.
Tsao has admitted that UMC provided technical assistance to Hejian — founded in November 2001 and capitalized at 350 million US dollars — but denied making any investment in the mainland firm.
Prior approval for hi-tech investment in the mainland is required under current Taiwan rules.
“I will file an administrative suit to prove my innocence,” Tsao said in a front-page story in the Economic Daily News.
The suit will be handled by the High Administrative Court and if rejected, he can appeal to the Supreme Administrative Court.
“Without the assistance of UMC, HeJian could still have been established and still can develop,” Tsao told the newspaper.
He said UMC had established cooperative ties with HeJian for the sake of its own future development on the mainland, not to benefit HeJian, as alleged.
Tsao also warned that Taiwan would discourage foreign capital and talent if it restricted hi-tech firms from investing on the mainland.
He was referring to the cabinet’s plan to increase penalties on unauthorized hi-tech exports to China amid rising tensions between the two rivals.
Under a bill, individuals or companies could be fined up to 30 million Taiwan dollars, tripling the current maximum fine, if they are caught exporting “sensitive technology” without government approval.
Repeat offenders could be jailed for up to 10 years and six months, according to the bill which requires parliament’s final approval.
In March 2002, Taiwan conditionally lifted a ban on mainland-bound investment in eight-inch (200 millimetre) silicon wafer plants after assurances from potential investors that the island would not lose out on the transferred technology.
So far, only UMC peer Taiwan Semiconductor Manufacturing Co, the world’s biggest contract microchip-maker, has received official approval and opened such a plant, in Shanghai.