Head of Well Phone Securities flees country

The chairman of Well Phone Securities Co Ltd (匯豐證券), one of Taiwan's oldest securities brokerages, has reportedly fled to China, leaving the firm to close its doors yesterday due to debts in excess of NT$7 billion and other serious irregularities.

The Chinese-language media reported yesterday that Well Phone Chairman Chen Chien-chi (陳謙吉) had reportedly embezzled over NT$70 million and was the target of an application filed by the Securities and Futures Commission to bar him from leaving the country.

According to the Taipei branch of the Investigation Bureau, Chen slipped out of Taiwan bound for Hong Kong on Sunday, one day before the commission applied for the travel restriction.

Chen's wife, surnamed Shih, was detained by bureau officials at CKS airport Monday morning as she was attempting to leave Taiwan, the reports said.

Sun Ming-yu (孫銘豫), one of the lawyers representing Well Phone, said yesterday that investors' rights are protected and that settlement of their stock transactions aren't affected, with the help of First Commercial Bank (第一商銀).

The lawyer also said that Well Phone's stock settlement and margin financing operations will immediately be transferred to Taiwan Securities Corp (台証證券).

Sun, however, denied any knowledge of reports that over 20 senior legislative, government and judicial officials -- including legislative speaker Wang Jin-pyng (王金平) -- were in involved in deals with the firm worth an estimated NT$2 billion in total.

Well Phone, one of the 24 brokerages established in 1962, had announced the previous day that it was filing for bankruptcy.

Vice Minister of Finance Sean Chen (陳沖) said that Well Phone is suspected of violating accounting laws because it borrowed more than it owned in total assets, yet failed to reflect that truthfully in its assets and liabilities reports.

According to Ding Ke-hwa (丁克華), vice chairman of the Securities and Futures Commission, the firm has admitted to covering up debt figures. The commission learned that NT$1.85 billion in loans did not show up in the its financial reports.

The investigation is ongoing, he added.