A Taichung District Court sentenced Tseng Cheng-jen (曾正仁), president of the Kuangsan Enterprise Group (廣三集團), to 20 years in prison yesterday for financial irregularities totaling roughly NT$20 billion.
The court yesterday also said that it suspects People First Party Legislator Liu Sung-pan (
In his judgement, Judge Chuang Shen-yuan (莊深淵), mapped out crimes committed by 43 defendants, including Tseng, and traced the flows of the huge sums involved in the case.
The court found that Tseng, head of Kuangsan as well as chairman of the board of Taichung Business Bank (台中企銀), a subsidiary of the group, abused his position at the bank to push through loans worth more than NT$9 billion in November 1998.
In addition, the court found that Tseng had also embezzled NT$9.2 billion from Shuntayu (順大裕), another subsidiary he acquired in 1996.
The court ruled Tseng had used the embezzled money to purchase stock in Shuntayu in an attempt to boost the firm's stock prices. Tseng also required employees -- including janitors -- to keep dummy accounts for his illicit financial endeavors.
In his decision, the judge blasted Tseng for masterminding the financial irregularities.
"Such were the damages done to the companies in question, the investors and the dozens of holders of dummy accounts, whose credit was tarnished and whose families were torn apart ... that the court believes justice will not be done without giving Tseng a heavy sentence," the judge said.
Tseng was sentenced to 20 years in jail and the remaining 42 co-defendants were given jail terms ranging between four months and 11 years.
Tseng said yesterday that he would appeal.
Of the NT$9.2 billion the court said Tseng embezzled from Shuntayu, NT$8.4 billion of that amount was for the purchase of Shuntayu stock that Tseng never paid for.
Though he had ample funds to cover the stock purchase, Tseng reneged on the transaction, causing the owners of the dummy accounts to face credit problems, debt and lawsuits.
Just NT$2.4 billion was recovered from the defendants.
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