Banks to cooperate on collecting debts from big defaulters

The board of directors of the Bankers' Association of the Republic of China (銀行公會) yesterday formulated a mechanism allowing banks to work together to collect massive bad debts from businesses whose operators who have fled the country.

The association yesterday announced four major defaulters, including Rebar Asia Pacific Group (力霸亞太企業集團), led by fugitive Wang You-theng (王又曾), which has incurred debts of NT$55.2 billion (US$1.7 billion).

Wang and his wife, Wang Chin She-ying (王金世英), fled the country at the end of last year immediately before a financial scandal erupted, bringing down two Rebar subsidiaries, China Rebar (中國力霸) and Chia Hsin Food & Synthetic Fiber Co (嘉新食品化纖), and causing a bank run at The Chinese Bank (中華銀行), another Rebar subsidiary.

Tuntex Group (東帝士集團), headed by Chen Yu-hao (陳由豪), is NT$31.5 billion in debt.

An Feng Group (安鋒集團), run by former Control Yuan member Chu An-hsiung (朱安雄), owes NT$16.6 billion.

Chen was indicted in late 2003 on suspicion of embezzling NT$800 million from his firm. He fled to China and eventually traveled to the US.

Chu was convicted on charges of vote-buying in September 2003 and sentenced to 22 months in jail, but was released on NT$5 million bail before absconding to China later that year.

State-run Mega International Commercial Bank (兆豐國際商銀) is the biggest creditor bank of the three companies, the association's tallies showed.

Kuangsan Enterprise Group (廣三集團), founded by Tseng Cheng-jen (曾正仁), has incurred debts of NT$5.4 billion. State-controlled Chang Hwa Commercial Bank (彰化銀行) is its biggest creditor bank.

Tseng was sentenced to 11 years in jail in 2004 for an embezzlement scandal involving his bank before he fled to China.

The two banks will soon convene the first meeting with other creditor banks to hammer out feasible debt-collection measures, the association said.

The initiative was first mentioned by Hu Sheng-cheng (胡勝正), chairman of the Financial Supervisory Commission.

Additional reporting by Rich Chang