Chinese-Americans Lobby Against McDonnell Deal : Aerospace: They ask Taiwan to rethink its ‘high-risk’ plan to purchase a stake in aircraft unit.
A group of Chinese-American professionals with ties to Taiwan are asking the Taipei government to reconsider its support of a Taiwanese group’s planned $2-billion acquisition of 40% of McDonnell Douglas’ commercial aircraft business.
The government owns nearly 30% of Taiwan Aerospace, the firm with a tentative agreement to purchase part of McDonnell Douglas’ Long Beach-based operations. The Taipei government has appointed a task force to advise it on whether to further finance the proposed deal, announced in November.
However, the group of 12 Chinese-Americans--led by Charles C. Chiang, a local business executive with contacts in Taiwan’s parliament--considers the proposed buyout a “high-risk deal” that the Taiwanese should re-evaluate.
In an interview Friday, Chiang criticized the Taipei task force reviewing the proposed deal, alleging that the group was taking part in a “whitewash” designed to pave the way for quick, unchallenged approval of the deal.
“Billions of dollars might be wasted,” said Chiang, chairman of South Bay Capital Corp., a Torrance venture capital firm.
McDonnell Douglas spokeswoman Renee Handler said Chiang’s group was not in a position to judge the tentative agreement.
“The evaluation is still under way and it would be premature to make any judgments on the deal at this time,” she said.
Chiang said the deal was disclosed in Taiwan only after the preliminary agreement was signed between Taiwan Aerospace and McDonnell Douglas, foreclosing public debate about whether the commitment of government funds had public support.
Indeed, since the deal was announced Nov. 19, growing political opposition has surfaced in Taiwan. Chiang said some Taiwanese parliamentarians suspicious of the proposed deal asked him and other Chinese-Americans to take a public stand.
Chiang criticized Taiwan Aerospace Chairman David Huang, calling him hasty for initially agreeing to a Jan. 31 target date for completing the proposed buyout. McDonnell Douglas acknowledged Tuesday that the transaction would not be concluded by that date.
“This $2-billion deal is not a corner gas station deal,” Chiang said. “And they wanted to close the deal before Jan. 31? This is incredible.” It is not known how broadly Chiang is supported within the Chinese-American community. His group is made up mainly of aerospace engineers, accountants and members of university faculties.
Chiang said two members of the Taiwan parliament, Suai Pan Chen and Fred Tsay, sent a letter to the Securities and Exchange Commission on Dec. 24 asserting that the Taiwan Aerospace deal did not have the final backing of the Taiwan government.
