Wed, Sep 08, 2004 - Page 1 News List

Corrupt PFP veteran sentenced to jail

GRAFT Liu Sung-fan, a former legislative speaker, was given four years for accepting kickbacks; problem is, he's been hobnobbing at the Republican convention in the US

By Cody Yiu  /  STAFF REPORTER

Former legislative speaker and People First Party (PFP) Legislator Liu Sung-fan (劉松藩) yesterday resigned his seat after the Taiwan High Court's Taichung Branch sentenced him to four years in jail for corruption.

"[Lu's] resignation is in accordance with the appropriate procedures and has been referred to the Central Election Commission," Legislative Speaker Wang Jin-pyng (王金平) said yesterday.

Liu is understood to have instructed his staff to submit a letter of resignation in his absence.

In addition to the jail time, Liu has been given a NT$30 million fine. The verdict cannot be appealed.

The court said that Liu received NT$150 million in kickbacks from Tseng Cheng-jen (曾正仁), president of the Kuangsan Enterprise Group and chairman of the board at the Taichung Business Bank, a Kuangsan subsidiary.

Tseng was sentenced to 11 years' imprisonment in June. Upon learning of the verdict, Tseng fled the country with his wife. He is thought to be living in Shanghai.

The court yesterday issued an order preventing Liu from leaving the country. But Liu has been reported to be attending the Republican Party convention in the US.

"If Liu isn't in Taiwan, we hope that he will return to serve his sentence. If the sentence cannot be executed, a warrant will be issued for his arrest and will be valid for 15 years," court spokesman Chen Chi-kang (陳紀綱) said.

In October 1992, Liu became president of the Bank of Taichung -- later renamed the Taichung Business Bank -- until October 1998, when Tseng took over the position.

Taichung prosecutors alleged in 2001 that Tseng had abused his position as president of the bank in November 1998 to push through loans worth more than NT$9 billion. He also kept dummy accounts in six companies to facilitate the illegal transactions.

The court yesterday determined that Liu had served as a middleman in these activities. Liu conspired with a private firm, the Chihching Company, to harbor one of Tseng's dummy accounts. The company, which at the time only had capital of NT$2 million, managed to secure a loan of NT$1.5 billion from Taichung Business Bank.

In return, Liu was paid NT$150 million as a kickback.

According to a Chinese-language newspaper report, Liu claimed that when the Chihching loan was secured, he was not holding any position at the Taichung Business Bank and was therefore not able to have any influence on the board's decision to grant the loan.

Liu had also claimed that the NT$150 million check he received from Tseng was money borrowed personally from Tseng for his election campaign fund.

As Liu is a legislator-at-large, the PFP will be able to replace him with another party member.

The next candidate on the PFP's legislator-at-large list for this legislative term is Chen Fei-lung (陳飛龍), the chairman of the Namchow Group.

The candidate following Chen is PFP Chairman James Soong (宋楚瑜), a situation that has resulted in speculation on whether the PFP will find a way to pass over Chen and send Soong to the legislature in his place.

Additional reporting by Debby Wu

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