It may be just another private equity deal, but the involvement of Taiwan's acrimony-prone political parties has put the spotlight on Sycamore Ventures' quest to buy assets from Hua-Hsia Investment Holding Company, the investment arm of the Kuomintang (KMT), one of Taiwans main political groups.
Sycamore, based in Princeton, New Jersey with additional offices in California, Singapore, Shanghai, Hong Kong and Taiwan, is reportedly interested in acquiring the KMT's holdings in a number of Taiwanese media companies, including shares in China Television, Broadcasting Corporation of China, Central Motion Pictures, and two KMT newspapers, Central Daily News and China Daily News.
Under a recent government ruling, political parties in Taiwan are required to sell certain media assets before the end of next year.
For decades following World War II, the KMT tightly ruled Taiwan and allowed no political rivals. Old grievances are still fresh – the country's current governing party, the Democratic Progressive Party (DPP), led by President Chen Shui-bian, has reportedly ordered an investigation into Sycamore's bid on suspicion that the firm is acting as a front for the KMT to continue its domination of the country's media.
“This is a very, very strange bid,” a government cabinet spokesperson told the Financial Times.
Sycamore, which reportedly is bidding $150 million for the assets, was a division of Citicorp Venture Capital until the group spun out in 1995. The firm has been a major investor in high-tech Taiwanese success stories such as Acer Group computer company and JTEK Technology, a chip maker. But it is unclear to what extent the firm has ties to the KMT, if any.
Sycamore is led by Kilin To, a former Citicorp investment professional whose family has business interests across Asia. All the other senior partners have deep roots in Taiwan's business community.
KMT officials have publicly stated a preference for Sycamore as a buyer of the media assets, and deny that the firm has anything to do with the political party. It is a denial that seems unlikely to quiet the many and various voices commenting on the mooted transactions though.