Mon, Jul 04, 2005 - Page 10 News List

Insider-trading scandal makes waves

MUDSLINGING The Financial Supervisory Commission said yesterday it has no plans yet to suspend anybody and will disclose certain facts pertaining to the matter today

By Amber Chung  /  STAFF REPORTER

Despite demands to the contrary by Democratic Progressive Party (DPP) lawmakers, the Cabinet-level Financial Supervisory Commission appears to have no immediate plans to suspend its Examination Bureau director-general, Lee Chin-chen (李進誠), on the strength of allegations of illegal insider trading on the stock market.

"There exists only one truth," the commission's vice-chairman Lu Daung-yen (呂東英) told the Taipei Times yesterday.

"We will disclose the facts about the case that the commission has acquired tomorrow [today] and issue a response to the legislators' demands," he said.

However, he declined to confirm if the "facts" to be revealed relate to the prosecutors' possible involvement in the illegal-trading case, which the commission alleged last week. He also remained tight-lipped about whether the commission would suspend Lee.

Lu's remarks came after DPP legislators Charles Chiang (江昭儀) and Hsieh Ming-yuan (謝明源) yesterday asked the commission's chairman, Kong Jaw-sheng (龔照勝), to remove Lee from his position as director general for his suspected illegal trading in Power Quotient International Co (勁永國際) shares.

Chiang said Kong should remove Lee from his position to avoid him abusing his power and hindering the investigation process, the Central News Agency reported yesterday. Kong last week said he believed Lee was innocent.

Lee's office has the power to investigate irregularities in the financial markets. But the Black Gold Investigation Center of the Taiwan High Court Prosecutors' Office claimed last week that they had found concrete evidence that strongly suggested Lee's likely involvement in the illegal trading of Power Quotient stocks. This was a huge blow to the financial watchdog, on the eve of its first anniversary celebrations.

The evidence included a note -- in Lee's handwriting, according to the center -- to the prime suspect, Lin Ming-da (林明達), for the short sale of Power Quotient shares. This proved Lee's involvement in the snowballing insider-trading scandal, the center said.

The prosecutors' claims infuriated the commission and led to intensifying in-fighting between the two government agencies. The commission on Friday decided to form its own investigating task force, while accusing some of the prosecutors of possible involvement in the scandal.

The commission's task force will investigate employees of the Taiwan Stock Exchange Corp, the Securities and Futures Bureau, the Financial Examination Bureau, prosecutors and investigators, as well as their close relatives, to determine whether they were engaged in illegally trading in Power Quotient shares, the commission said.

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