State-owned banks to keep money flowing to Vietnam
By John Liu, The China Post
May 16, 2014, 12:05 am TWN
TAIPEI, Taiwan -- Major state-owned banks are not to tighten money supply to Taiwanese businesses operating in Vietnam during this difficult time, Finance Minister Chang Sheng-ford (張盛和) said in a Legislative session yesterday.
A Legislative session was held by the Finance Committee yesterday, where the anti-China sentiment in Vietnam that resulted in great damage to Taiwanese businesses remained the focal point.
Kuomintang (KMT) lawmaker Lai Shyh-bao (賴士葆) inquired about the loss incurred by Taiwan's financial institutions based in Vietnam and if it was possible to obtain compensation from the Vietnamese government.
There are a total of 11 Taiwan-based financial branches operating in Vietnam, providing NT$64.2 billion worth of loans and making NT$6.3 billion worth of investment. Whether there is any loss of collateral because of the mass protest is still under investigation, said FSC Vice Chairman Huang Tien-mu (黃天牧).
The Non-Life Insurance Association has also been charged to make an estimation regarding the amount of loss incurred, Huang said, adding that the estimation will take some time, given the turmoil in Vietnam.
State-owned Banks Won't Tighten Money Supply
KMT lawmaker Lu Shiow-yen (盧秀燕) pointed out that the government offered support to enterprises and the local workforce during the financial crisis, and questioned whether the government would do the same during this intense period.
FSC Vice Chairman Huang Tien-mu (黃天牧) said in response that the FSC will deliberate the issue with the Banks Association to come up with appropriate assistance methods. Finance Minister Chang said he would request that the eight state-owned banks do not tighten money supply during this difficult time.
With regard to whether businesses that suffer loss may receive favorable taxation terms, Finance Minister Chang said the answer would be positive if the company is a subsidiary of a Taiwanese business. However, if the company is a subsidiary of a Vietnamese business, then the answer would be no since its financial statements would be compiled separately. Taiwanese companies that wish to receive a tax deduction must submit evidence of loss such as pictures that illustrate property damage, he added.
Contacts Made to Vietnam Government
Both Finance Minister Chang and FSC Chairman Tseng Ming-chung (曾銘宗) said they would contact Vietnam's central bank and finance ministry requesting their assurances for the safety of Taiwanese businesspeople.
Huang said that the FSC will collaborate with the Ministry of Foreign Affairs in communications with the Vietnamese government, in an effort to sort out which party is to be held responsible for loss incurred. Finance Minister Chang promised that the ministry would contact the Vietnam finance ministry yesterday.
Nevertheless, if Taiwan-based insurance companies do provide coverage, they will have to shoulder their commercial responsibilities, Huang said.