FSC's probe is too slow: Wu Nai-jen

The nation's top stock regulator yesterday said that the lengthiness of the Financial Supervisory Commission's (FSC) investigation of a company's suspicious capital flows has made it much more difficult to catch the people suspected of insider trading.

Investigators are still probing the so-called "vultures" scandal surrounding the fraudulent transactions of Power Quotient International Co (勁永國際) shares.

Wu Nai-jen (吳乃仁), chairman of the Taiwan Stock Exchange (TSE), said the exchange raised its suspicions of abnormal fluctuations with Power Quotient's shares late last year. To secure more evidence, the TSE asked for the FSC's help to examine the capital flows.

"Capital flows are key evidence that can really prove whether illegal trading has taken place. But the FSC did not hand over its results until early March, and this has been dragging on too long," Wu said.

Wu made the remark on the sidelines of a meeting held by the legislature's financial committee yesterday morning to review the government's handling of the scandal.

He said that based on his experience, suspects in illegal trading cases can be hunted down quickly if the relevant information is gathered within several days.

"If the process is dragged out for two, three months or even longer, news is more likely to be leaked out" and evidence would be eliminated, Wu added.

Investigators suspect that high-level government officials are also involved in the infamous Power Quotient scandal, and the former director-general of the FSC's Examination Bureau, Lee Chin-chen (李進誠), stepped down and has been banned from leaving the country before the case is closed.

Even Wu has been listed as a defendant in another insider trading case.

So far, only one prime suspect, Lin Ming-da (林明達) -- reportedly a close friend of Lee -- was charged with short-selling Power Quotient shares in violation of the Securities and Exchange Law (證券交易法), and was detained in July.

Responding to lawmakers' questions, Wu said that he has neither short-sold company shares nor assisted "vultures" in profiting from the stock market.

FSC chairman Kong Jaw-sheng (龔照勝) promised that FSC officials and their close relatives have not been involved in the illegal trading of shares, according to the FSC's internal investigation.

However, lawmakers slammed the commission and the Ministry of Justice for inefficient handling, saying the prolonged scandal has led to the public's diminished confidence in the government.

Citing the case of New York state's attorney-general Eliot Spitzer, Democratic Progressive Party Legislator Julian Kuo (郭正亮) criticized the justice ministry's inability and urged it to extend investigations to high-level officials, including Kung and Wu.