[2] In January 1995, Chen Ding-nan, president of the Asia-Pacific section of the Kuomintang’s (KMT's) Central Investment Holdings Company, visited Palau.

By August 1995, Chen had made an agreement with Palauan politician Alan Seid to build the Palasia Hotel.

Due to the problems associated with property purchases by foreigners the hotel was built on Seid's land.

[5] The Taiwanese stake in the Palasia Hotel is not held by the government of Taiwan but by the KMT political party in its private capacity.

In the democratic era this has made it a subject of controversy with an investigation by the Ill-gotten Party Assets Settlement Committee.