Two former top executives at a leading financial holding company were both sentenced to seven years and six months in prison yesterday, after they were found guilty on breach of trust charges and violating the Securities Exchange Act (證券交易法).
Former Yuanta Financial Holding Co (元大金控) chairman Rudy Ma (馬志玲) and his wife, former Yuanta Securities Co (元大證券) chairwoman Judy Tu (杜麗莊), were sentenced by the Taipei District Court in the first ruling after a year-long trial.
The two, along with a number of senior executives from the holding company, were indicted in April last year on suspicion of involvement in irregular trading.
According to prosecutors, the irregularities involved the sale of shares from Yuanta Investment Trust (元大投信) to Yuanta Securities in 2005. The trust bore substantial losses on its interest rate-linked investments after the US Federal Reserve hiked interest rates.
Prosecutors had originally asked for a sentence of 10 years after it was estimated that the companies — which are both subsidiaries of Yuanta Financial Holding — made illegal profits of NT$670 million (US$21 million) from the deal.
Ma, a self-made billionaire, was ranked No. 33 on the Forbes list of Taiwan’s richest people this year. The founder of Yuanta Financial Holding Co which has become the nation’s largest securities company, is estimated to have a net worth of up to US$820 million, down from US$1.1 billion in 2008.
At his peak, Ma reportedly controlled a network of more than 150 offices and 2,400 stock brokers, and was seen as exerting control over as much as 20 percent of the publicly listed stock on the Taiwan Stock Exchange.
Both Ma and his family reportedly have close ties with the administration of former president Chen Shui-bian (陳水扁). Ma’s son, former Yuanta Financial Holding president Victor Ma (馬維建), and former Yuanta Securities Corp board member Tu Li-ping (杜麗萍) pled guilty in February to helping the former first family launder money.
Along with the couple, four company officials were also sentenced to prison terms ranging from three years and six months to five years. A fifth official, Tseng Hung-chan (曾鴻展), was found not guilty. The ruling is not final and those sentenced are expected to appeal.
In related news, the Taipei District Court handed down heavy sentences to former Taiwan International Investment Management (金鼎投信) chairman Chang Ping-chao (張平沼) and his wife, Chen Shu-chu (陳淑珠).
The two were also found guilty yesterday in a breach of trust case in connection with flaws in the partial liquidation of the investment company’s structured note investments in 2005 — which led to investors sustaining financial losses of at least NT$200 million (US$6.3 million), prosecutors said.
Chang was sentenced to seven years and six months in prison, while Chen was sentenced to eight years and six months. The pair is also expected to file an appeal.