Mon, May 30, 2005 - Page 10 News List

Financial officials confirm questioning of Waterland chair

SUSPICIOUS TIMING Authorities questioned Walter Lin over his firm's purchase of stock in Procomp, whose former chairwoman is his wife

By Amber Chung  /  STAFF REPORTER

The Financial Supervisory Commission confirmed over the weekend that it had questioned Walter Lin (林華德), chairman of Waterland Financial Holding Co (國票金控), over his suspected involvement in the Procomp Informatics Co (博達科技) embezzlement scandal.

Lin is the husband of Procomp's former chairwoman Sophie Yeh (葉素菲), who was released earlier this month on bail of NT$80 million (US$2.6 million) after seven months in detention. It was the nation's second-highest bail on record.

"We questioned Lin from

9:30am to 5:30pm last Friday ... to hear his explanation of Waterland's purchase of a great deal of Procomp's stocks right before the scandal broke," the Chinese-language Liberty Times quoted Lee Chin-Chen (李進誠), director general of the commission's Examination Bureau, as saying yesterday.

The bureau has no plans for more questioning for the time being, Lee said in the report.

Waterland's securities arm was found to have spent around NT$45.7 million on 1.3 million shares of Procomp and a number of corporate bonds in April last year, which caused NT$25 million in losses for Waterland, the nation's smallest financial service provider.

The timing of Waterland's equities purchasing was suspicious, as Yeh was accused of embezzling over NT$7 billion from Procomp in June last year, after the chipmaker defaulted on a NT$3 billion bond while still having NT$6 billion in liquid assets on its books.

In addition to the NT$3 billion in bonds on which the company defaulted, Procomp also reported an additional NT$5.9 billion in unpaid bank loans at the time.

In October last year, the Shilin Prosecutors' Office recommended a 20-year prison sentence and a NT$500 million fine for Yeh.

With Lin involved in a management dispute at Waterland, the financial regulator's move could make it more difficult for him to safeguard his position in the face of rebel shareholders.

Two groups of major shareholders, led by Taiwan Financial Asset Services Corp (台灣金服公司) chairman Hung San-hsiung (洪三雄) and the Nice Group (耐斯), which took more than 20 percent of stakes in Waterland, are seeking to push Lin aside in the re-selection of the company's board directors at a general meeting scheduled for June 29. Lin and his supporters control a combined 6 percent stake in the firm.

Last Thursday, one day before being questioned, Lin called on Minister of Finance Lin Chuan (林全) to seek support from the ministry, which controls a nearly 13 percent stake in Waterland. But the senior banker was given the cold shoulder, and the minister called a press conference the next day to reaffirm the government's neutral position in the dispute.

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