RTC Director

Dominican Republic woos China, but Taiwan ties loom large

Dominican Republic can be the gateway for Chinese products to U.S. and European markets, due to the Caribbean country’s free trade agreements with both regions, said Economy minister Temistocles Montas, who’s visiting the Chinese capital today.

Montas arrived in China on Sunday to boost investment in his country and spoke on the “Prospects for cooperation in the Caribbean Region" at the China Institute of Contemporary International Relations (CICIR) from the capital, with various Chinese ex representatives in Latin American and CICIR members in attendance.

The official’s visit aims to take a "quantum leap" by Chinese investment in, China's second biggest trading partner in the Caribbean, despite both countries’ obstacle of not having diplomatic ties, because of Dominican Republic’s relations with Taiwan.

"The issue of diplomatic relations has not been addressed. For China, at this time, it’s essential to empower its policy of reunification with Taiwan and therefore they don’t want to touch the issue," the official said.

He noted however "a positive attitude to promote tourism and investment and cultural relations."

Montas admitted nonetheless that none of the meetings slated with Communist party or Chinese government officials materialized.

He said the visit aims to attract Chinese investors by making them aware of Dominican Republic’s “great potential in the mining sector, in agriculture or industry.”

by RTC Director

Taiwan plastics heir sues over ‘$15 billion in Bermuda trusts’

The Bermuda Supreme Court must decide a case that involves one of Taiwan’s largest companies and a family fortune worth billions held in trusts on the Island.

Winston Wong, the son of Formosa Plastics Group’s late founder Wang Yung-ching, has sued an adviser for transferring the bulk of the family fortune valued at $15 billion into Bermuda trusts controlled by other family members.

Dr Winston Wong, eldest son of YC Yang, said in a statement today: "The Bermuda court now has an opportunity to recognize and resolve the injustice that has been perpetrated on my father, on his heirs, the shareholders of FPG, and on the people and government of Taiwan. We trust that justice and truth will prevail."

Hung Wen Hsiung set up the trusts, excluding Wang, referred to in court documents as YC Wang, from the ownership and some members of his direct family as beneficiaries, according to a statement of claim filed by Wong yesterday in the Supreme Court of Bermuda.

Bermuda is the fourth jurisdiction where Wong filed claims to recover the estate of his father, which he said is valued at $18 billion.

Bloomberg reported that Hung, Wong’s half-sisters Susan Wang and Sandy Wang, as well as group Chairman William Wong and Wilfred Wang are among the trusts’ managers, according to a copy of the court filing. Wang died in the US in 2008 at the age of 91.

He founded Taiwan’s biggest diversified industrial company, Formosa Plastics Group, which made pretax profit of NT$143 billion ($4.8 billion) in 2011, according to the company’s website. The group has worldwide assets valued at more than $85 billion and employs 100,000 people, according to the lawsuit.

The case is Between Wong Wen-Young and Grand View Private Trust Co. in the Supreme Court of Bermuda.

“We are seeking to invalidate the transfers and get a declaration that the assets are held for all the heirs of Y.C. Wang,” Mark Stoutenburg, Wong’s lawyer, said in a phone interview. Frank Fu, a spokesman for the Formosa Plastics Group, declined to comment on the lawsuit when reached by phone by Bloomberg today.

In a statement put out, Dr Winston Wong, eldest son of YC Yang, said 90 percent of his personal fortune allegedly transferred without his consent

The statement said the Bermuda outcome could determine control of Formosa Plastics Group, and that the offshore trusts are the largest shareholders of "Four Treasures"

The statement said: “Dr. Wong conducted an extensive four-year investigation that revealed the following key findings: 1) that the trusts are non-charitable; 2) that the trusts were established in secret by a minority of Y.C. Wang's family; 3) that the assets were transferred into the trusts without his father's consent; and 4) the trust assets should have been declared as part of his late father's estate.”

Dr. Wong's lawsuit focuses on the contention that the transfer of YC Wang's assets into the trusts is invalid and he seeks to have these assets returned to their rightful owners: Y.C. Wang's estate and legal heirs.

The lawsuit names as defendants, the Grand View Private Trust Company Ltd. (established in 2001), Transglobe Private Trust Company Ltd. (2002), Vantura Private Trust Company Ltd. (2005) and Universal Link Private Trust Company Ltd. (2005), all of which are incorporated in Bermuda.

Mr. Hung Wen Hsiung, the late Y.C. Wang's long-time personal financial advisor, is also named as a defendant for his role in creating the trusts and transferring Y.C. Wang's assets to the trusts.

Mr Stoutenburg noted: "It's impossible to believe that the late YC Wang gave the required consent and approved the transfer of his immense fortune to these four trusts. There is no evidence that Mr. Wang knew that the transfer of these assets would permanently strip him of his ownership of them and give control of the assets to just a tiny minority of his large family. The Bermuda trusts together hold approximately 90 percent of YC Wang's personal fortune.

"Given YC Wang's famously meticulous attention to detail, it is inconceivable that he would have approved transactions of such magnitude and importance without being involved in every step. There is no evidence, however, that he ever saw, read or signed any of the complex documents establishing the trusts — which were written in English, a language neither he nor his advisor Mr. Hung could speak or read. The defendants and their agents do not deny these facts," he continued. "This has led Dr. Wong to the inevitable conclusion that his father was deceived."

Stoutenburg explains, "The Wang Chang Gung Charitable Trust, established by YC Wang and named in honour of Dr. Wong's grandfather, was the blueprint for Mr. Wang's charitable giving. He was very detailed and specific about its mission, its management, and its financing. He included his entire family. He did nothing in secret. He left nothing to chance. He made everything transparent.

"The Bermuda trusts, established in secret, with no clear charitable mission or activity, stand in stark contrast to this and are trying to hide behind the good deeds of the Wang Chang Gung Charitable Trust. The purpose trusts were established offshore in Bermuda to avoid scrutiny in Taiwan and so that they could be hidden from Y.C. Wang's estate.

“Despite repeated requests, no proof has been provided about the purported charitable activities of the trusts, nor has Dr. Wong's widespread investigation turned up any evidence that the Bermuda trusts are engaged in any charitable activities."

In sum, says Stoutenburg, "The evidence indicates that the Bermuda trusts were primarily established to: 1) secretly ensure that the control of FPG was kept in the hands of a few family insiders and guarantee that other family members could not inherit significant shares upon YC Wang's death; 2) drastically reduce YC Wang's estate; 3) obscure the true ownership of FPG under the guise of foreign investors; and 4) hold the assets of a vast, global business empire controlled by a few members of the family. All of this was done offshore to avoid the scrutiny of Taiwan regulators."

The statement added Dr. Wong's lawyers assert that the people who control the trusts have unchecked and unregulated power to do whatever they like with the billions of dollars of assets in the trusts. There are no outside authorities or government bodies in Bermuda that actively supervise the trusts or the billions of dollars worth of assets they control.

To the contrary, these offshore purpose trusts, named in Dr. Wong's lawsuit, are controlled and self-supervised by the same people who benefit from the decisions they make, the statement said, going on to say: “The lawsuit, which marks a critical point in Dr. Wong's long-standing efforts to restore his late father's legacy, has profound implications for the future of FPG. If the Bermuda court rules that the transfer of YC Wang's FPG stake to the offshore trusts should be undone, it would affect the current management and control of FPG.

“Additionally, if the Bermuda court declares the transfer of assets to the trusts invalid and turns the assets over to YC Wang's estate, the Taiwanese Government could receive an estimated NT $158.4 billion to NT $237.6 billion in various taxes (US $5.3 billion to US $7.9 billion) — which could eliminate the Government's anticipated 2013 budget deficit of NT $214.4 billion (US$7.15 billion).”

by RTC Director

Government auction of bonds under-subscribed - treasury bills over-subscribed

Grenada’s recent default on an international bond and uneasiness in the long-term capital market have been blamed for St. Vincent and the Grenadines being unable to successfully auction an EC$40 million (One EC dollar = US$0.37 cents) 10 year-bond.

The bond was auctioned on March 19 to assist with financing of public sector investment programme for 2013 and at the close of the action, 11 bids totalling EC$25.9 million had been received.

Prime Minister Dr. Ralph Gonsalves said marketing could also have contributed to the under-subscription of the bond.

“The Director General of Finance and Planning advises me that the marketing was not optimal,” Gonsalves said and alluded to Grenada’s recent default on its bond.

“The broker made very little effort to market the bond, with only eight entities purchasing the new issue, compared with 15 in the maturing issue. Indeed, the broker didn’t bring any new investor to the table.”

Gonsalves said “uneasiness in the long-term capital market, as a result of the current global economic situation and domestically, we believe too, with the Building & Loan Association issue” also contributed to the situation.

He said the maximum rate of interest was seven per cent to be paid semi-annually, the pricing mechanism was competitive bidding, repayment was to be amortised semi-annually and the maturation date was March 19, 2023.

The bond was auctioned on regional government securities market using the primary platform of the Eastern Caribbean Securities Exchange (ECSE) and Gonsalves said the government had decided not to ask the Trinidad company, which arranged the bond last year, to arrange the recent auction.

“We say let’s see how Bank of St. Vincent and the Grenadines will do. We asked them to be the arranger for the bond and investors were required to submit bid through any of the licensing intermediaries through the ECSE.”

Gonsalves said investors seem reluctant to commit to longer-term subscription, as evidenced by the Bank of St. Vincent and the Grenadines initial public offer, which was also under subscribed.

“I want to say this, and I want this point to soak in. investors have an uncertainty about long-term bonds of 10 years. They prefer to take shorter-term risk and wait and see, given the uncertainty in the climate.”

He said while the bond was undersubscribed, treasury bills offered one week later were over-subscribed by almost nine million dollars.

“And the treasury bills settled on a rate of less than three per cent, which was excellent. What this is telling us is that people are looking for shorter-term money.

“I have been advised by my financial advisors that they are quite confidence of the sale of the other $14 million on the market, nevertheless,” Gonsalves said.

 Source-Global Post

by RTC Director