Chungwa Post suffers loss of NT$20.5 bil. on investment

During a budget screening session held by the transportation committee yesterday morning, lawmaker Lo Shu-lei of the ruling Kuomintang scanned the investment records of Chunghwa Post and found that the firm has suffered losses from investment in several “underground mines in the past years, referring to stocks of firms mired in financial troubles. Lo said that Chunghwa Post posted a loss of NT$91.44 million from investing in Horng Tech, a maker of computer accessories; a loss of NT$150 million from investment in Pacific Electric Wire & Cable; a loss of NT$240 million from investment in Procomp Informatics Co., a now defunct chip-maker.

Lo continued, in 2008 alone, the company posted a red ink of NT$20.5 billion from investment in derivative financial products, due to poor investment risk control.

The lawmaker called for Chunghwa Post to be more careful in managing its investment risk and make investment information more transparent.

In response, You Fang-lai, chairman of the Chunghwa Post, stressed that his company has followed three major principles in making investments, namely security, liquidity and profitability.

But Lo said if the Chunghwa Post really understands how to safeguard the security of its investment, it wouldn't hit the “underground mines.”

She urged the company to step up investment risk management from now on.

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