Former minister of finance Lee Yung-san (李庸三) flatly denied a media report that he accepted sexual favors arranged by a Taichung-based construction company, which was alleged to have bribed him when he was chairman of the state-run Farmers Bank of China (農民銀行) into granting loans to it in 1997.
"Apple Daily's groundless reports have severely damaged my reputation," Lee said in a written statement, "I'll take legal action soon."
Lee said that the prosecutors' eight-month investigation had cleared his name by indicating that he had not received any sort of kickbacks from the company.
"Otherwise, there'll be complaints in the bill of indictment," the statement added.
On Thursday, Apple Daily reported that Lee and Huang Ching-chi (黃清吉), the lender's president, checked into the Landis Hotel in Taichung on Aug. 13, 1997. Both were taken to play golf and later entertained in a nightclub, where "many young-babe call girls" were brought in to keep them company, the report said.
Even though the story's headline implied that Lee was involved in a "sexual scandal," the story itself pointed the finger at Huang only, accusing him of receiving sexual services six times.
The "lodging and entertainment costs," amounting to tens of thou-sands of NT dollars were paid by the construction company, which pushed both bank officials to grant NT$200 million in loans to Hotel Royal Chihpen (知本富野飯店) in Taitung, according to the report.
Late last month, Lee, Huang and 28 other defendants including bank staffers were indicted for being allegedly involved in illegally granting loans to the hotel between 1996 and 1998.
Prosecutors recommended a seven-year jail term on the corruption charges for Lee, who allegedly repeatedly granted loans to the hotel even though he was aware that it had made a false report on its construction progress.
Prosecutors also recommended a 12-year prison term for Huang for accepting bribes and sexual services.
The Ministry of Finance dis-missed Huang from the bank's presidency after receiving the indictment, but kept Lee on as chairman of the Gretai Securities Market (櫃檯買賣中心), formerly known as TAISDAQ.
Lee became chairman in early January.
The ministry yesterday refused to comment on the Apple Daily story.