Taiwan’s Lai Says Foreign Investors Worried by KMT-Backed Law

(Bloomberg) -- Taiwan President Lai Ching-te said companies and foreign chambers of commerce had expressed concern at controversial legal changes giving lawmakers more powers to probe, summon and question corporate and government officials.

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Lai has signed the legislation and is referring it to the island’s Constitutional Court for review, his office said in a statement Monday. Lawmakers passed the bills in late May and on Friday June 21 rejected his request for them to reconsider them.

Lai’s ruling Democratic Progressive Party won its third successive presidential election this year but lost its majority in parliament, where the opposition Kuomintang and its Taiwan People’s Party allies used their narrow majority to push through the legal changes. The KMT say they want to improve scrutiny of the presidency, but critics say the laws represent a power grab and raise questions about the handling of sensitive information.

“The new investigative power has been extended to the military, private entities, and relevant members of society, and we’ve received a lot of international concerns from companies and foreign chambers of commerce,” Lai told reporters. “We’re worried that the implementation of the law will not protect commercial secrets of enterprises, and will affect Taiwan’s international competitiveness.”

Lai said that’s one reason that the Presidential Office has proposed that the Constitutional Court review the legislation.

The KMT has downplayed suggestions that any hearings could be a threat. Its caucus has said only companies colluding with the government would be summoned by the lawmakers.

Because the changes allow lawmakers to summon executives, DPP legislator Puma Shen has said that may lead to companies being probed to disclose trade secrets. The most sensitive company is Taiwan Semiconductor Manufacturing Co., which makes the bulk of the world’s most advanced chips.

Before the May passage of the legislation, the island’s new science and technology minister, Wu Cheng-wen, directly addressed the importance of safeguarding the island’s proprietary advanced technology.

“When TSMC promises advanced manufacturing technology overseas, it is still building that first in Taiwan,” Wu said at his first press conference.

--With assistance from Yian Lee.

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