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Former FSC chairman indicted

The Taipei District Prosecutors' Office announced yesterday that it has indicted Kong Jaw-sheng (龔照勝), former head of the Financial Supervisory Commission, for jobbery in his previous position as chairman of the state-run Taiwan Sugar Corp (Taisugar, 台糖).

Prosecutors said they had asked for a seven-year jail term for Kong.

Prosecutors added that Kong failed to comply with legal procurement regulations when he served as a government-appointed executive of a state-run company.

Kong, 51, was charged with improperly benefiting others with NT$100 million (US$30 million)and breach of trust in three cases of corruption during his term as Taisugar chairman from December 2003 to June 2004.

He was accused of granting a certain company exclusive distribution rights to market upscale collagen cosmetics products and opening a coffee shop without following the proper public procurement process.

He was also charged with improperly hiring his sister-in-law as an adviser with a monthly salary of US$3,000.

innocent plea

Kong denied all accusations and maintained his innocence.

He said in a statement that it did not make sense for him to covet such petty profits, given his abundant experience in managing deals worth hundreds of millions of US dollars during decades of services in foreign investment institutions.

Kong added that he did not know the company nor the person who won Taisugar's exclusive cosmetics franchise.

As a chairman, he was not involved in administrative work, and all the deals were made legally and in compliance with normal practice, he said.

Calling the accusations "unimaginable," Kong said he was framed by people whose interests were at risk when he pushed for reform to curb the state-run company's annual losses of NT$2.5 billion a year and seek a better future for the company's 5,000 employees.

Kong's alleged wrongdoings cost him his job in May as the first chairman of the Financial Supervisory Commission, an unprecedented independent position that was established in July 2004 to govern and supervise the financial sector.

Prior to his public service, Kong was an experienced investment banker who had served in a variety of posts in foreign financial institutions including Credit Suisse First Boston.
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