Terry Gou says finance policy 'out of touch'
By Kathryn Chiu,The China Post
June 27, 2013, 12:09 am TWN
TAIPEI, Taiwan -- Tycoon Terry Gou yesterday said that Taiwan's finance policies enacted in the last decade are extremely out of touch, describing those finance ministers with diplomas from "fancy U.S. business schools" as living on another planet.
Gou, the chairman of Hon Hai Precision, the world's largest contract electronics maker, was speaking at the company's annual general shareholders' meeting.
Asked after the meeting about the annulment of the stock gains tax from transactions, Gou gave some candid comments about the financial policies promulgated by Taiwan over the past decade, ranging from earlier stock bonus taxes to the recent stock gains tax.
He called the stock gains tax "a theater of absurdity," saying that "the government knew in the first place that (the tax) was not going to work."
Naming the country's four previous finance ministers, he concluded: "Their policies were so out of touch with society it was like they were living on another planet."
"They happen to have diplomas of fancy business schools in the U.S."
"To my knowledge, the U.S. took a leaf from Taiwan's policies but sadly policymakers in recent years have been digging graves for Taiwanese."
Apology for Ugly Share Price
Gou Wednesday apologized for his company's falling share price.
"I have to apologize here because our share price did not meet investor expectations ... There is no excuse for us, but I hope that all of you can stay confident in our company's business outlook and our management team."
Gou said that Hon Hai is still capable of surviving harsh macroeconomic conditions in the future because the company's fundamentals remain intact, and he promised to win back investor confidence as Hon Hai steps up investment in research and development.
Hon Hai confirmed yesterday a plan to spin off its connector business to streamline its operations and focus on emerging businesses such as electronic commerce.
"We are going to transform ourselves from an aircraft carrier into a group of battleships," Gou said at the shareholders' meeting.
He said that the company is planning to spin off three units that currently account for 2 percent of Hon Hai's total revenues.
Gou said he was confident the connector unit would rank among the world's top two companies in its sector in the coming years, thanks to its competitive core technologies.
The company's revenues have also tumbled, falling 12.59 percent year-on-year in the first five months of 2013 to NT$1.4 trillion.
Industry analysts said the lower-than-expected revenues were in part due to weak demand for Apple Inc.'s iPhone 5 amid intensified competition from phones powered by Google Inc.'s Android operating system.
(Related story on page 5)