Asia Pacific Telecom chairman resigns

The chairman of Asia Pacific Telecom has resigned after the government threatened to replace him over a board decision to purchase Atech System Integrated Co.

"The government should not interfere with the decision of a private firm. Otherwise why bother to have a board of directors," said Lai Chun-tien in a news conference yesterday.

Last Friday, Asia Pacific Telecom's board voted to have its subsidiary Asia Pacific Online to purchase Atech at a swap ratio of 1.8 to 1, translating into a purchase price of NT$170 million for a company whose paid-up capital is NT$95 million.

The decision angered the Taiwan Railway Administration (TRA) under the Ministry of Transportation and Communications (MOTC), which holds a 25.5 percent stake in Asia Pacific Telecom and has six members sit on the company's board of directors, including Lai.

A board meeting was held yesterday. With Lai's resignation, the Atech purchase was voted down in the meeting.

TRA director general Fan Chih-ku and deputy director general Hsu Yi-nan were both present in the meeting yesterday when Lai handed his resignation. As TRA opposes the purchase in the first place, neither of them asked Lai to stay on as chairman.

Lin You-hsien, chief accountant of MOTC, was quoted by the United Evening News as saying there were several questions that needed to be addressed before the purchase could take place.

He said Atech's balance sheet showed the company's paid-up capital last year was NT$95 million. However, there was NT$129 million worth of inventories, translating into a shortfall of some NT$27 million that remains unaccounted for.

"The MOTC is against this deal, at least for now. Although Lai cast a nay vote, he still got the deal approved," Lin said. "The MOTC cannot accept this."

Asia Pacific Telecom was one of the firms under the Rebar Group, which crumbled last year after several of its businesses failed. The group's founder, Wang You-tseng, was charged with embezzling funds from the company and has been listed as a fugitive. Wang and one of his concubines, Chin Shih-ying, are currently in hiding in southern California.

To save Asia Pacific, the government in March 2007 appointed Lai to be its chairman, hoping that he would restructure the firm with his financial expertise.

Lai is a well-known accountant in Taiwan. The accounting firm he headed, Tsu Cheng, is one of the top three in Taiwan. He also has strong networks in Taiwan's financial and political circles, given his position as the brother of the aunt of the wife of Lee Ying-yuan, former Council of Labor Affairs chief and now a top official of the campaign office of Frank Hsieh, presidential candidate of the Democratic Progressive Party.

In a meeting on Oct. 26, 2007, Asia Pacific's board, under Lai's leadership, voted to reduce capital by NT$32.84 billion and then increase capital by NT$20 billion, in the hope of drawing more local and overseas investors.