Former minister of finance Lee Yung-san (
The Taipei District Prosecutors' Office recommended a seven-year jail term for Lee based on the Statute for Punishment of Corruption (貪污治罪條例).
Most of the 29 defendants are bank staffers, who were allegedly involved in illegally granting loans to Hotel Royal Chihpen in Taitung between 1996 and 1998, the indictment said.
Lee was chairman of the Farmers' Bank of China during that period.
Prosecutors also recommended jail terms of between seven and 12 years for the bank's former general manager Chen Wen-lin (陳文林), former deputy general manger Huang Ching-chi (黃清吉) and former KMT lawmaker Hung Hsing-rung (洪性榮) on charges of profiteering and violating the Company Law (公司法).
According to the investigation, between 1996 and 1998, Hung peddled his influence as a member of the legislature's Finance Committee to lobby several banks and financial institutions, including the Farmers' Bank of China and the Central Trust of China, to grant loans of around NT$3.4 billion to Hotel Royal Chihpen and construction company Chieh-kuang Co.
Hung was rewarded with NT$5 million in cash and use of a Cadillac for two years. In addition, half of the hotel's stock, worth NT$650 million, was registered under a company owned by Hung's son, Hung Yi-yuan (洪益元).
Lee, Chen and Huang allegedly granted loans again and again to the hotel even though they were aware that the hotel had made a false report on its construction.
The three executives also ignored their aides' opposition after bank staffers had found out that construction was far behind schedule.
The investigation showed that 60 percent of the loans to Chieh-kuang Co was either embezzled or used to clear debt unrelated to the construction project. As a result, the hotel has still not been completed.
Prosecutors accused Hung of abusing his position to put pressure on banks, while executives of financial institutions used their discretionary powers improperly, causing serious losses to their banks.
For this reason, prosecutors recommended a 12-year prison term for Huang, who has financial expertise but alleged accepted bribes, including sexual services.
The prosecutors recommended a seven-year term for Chen, 10 years for Hung and six years for his son.
When contacted by the press yesterday morning, Lee refused to answer questions because he he said had not received the indictment.
Later he issued a statement proclaiming his innocence, in which he also argued that he had not benefited from the construction project. He said he was confident that his name would be cleared.
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