Fri, Dec 17, 2004 - Page 1 News List

Mosel Vitelic boss indicted over huge NT$18 billion fraud

By Jimmy Chuang  /  STAFF REPORTER

Hu Hung-chiu, chairman of Mosel Vitelic Inc., in a file photo from Nov. 8 at the Taipei District Prosecutor's Office. Hu was indicted yesterday for embezzling more than NT$17 billion from Pacific Electric Wire and Cable Co, and faces 20 years in jail and a fine of NT$1 billion.


Taipei prosecutors yesterday indicted six people on charges of embezzlement and offences against the Securities Exchange Law (證券交易法) for allegedly stealing huge amounts of company funds from the Pacific Electric Wire and Cable Co (太電).

These six people are Mosel Vitelic Inc (茂矽) Chairman Hu Hung-chiu (胡洪九), who is the former chief financial officer of the company, former chairmen of Pacific Electric Tung Yu-chieh (仝玉潔), Tung Ching-yun (仝清筠) and Jack Sun (孫道存), former vice chairman Miao Chu-yi (繆竹怡) and former secretary to the chairman Huang Ching-lin (黃靜琳).

In the indictment, Taipei Prosecutor Chu Ying-hsiang (朱應翔) sought a 20-year sentence for Hu with a fine of NT$1 billion, a ten-year sentence for Miao with a fine of NT$500 million, a seven-year sentence for Tung Ching-yun with a fine of NT$100 million and a four-year sentence for Huang. As for Sun and Tung Yu-chieh, Chu did not seek any specific sentences for them. Tung Yu-chieh is the father of Tung Ching-yun.

Pacific Electric's accountants Chou Chi-ping (周齊平) and Lee Chia-hui (李嘉惠) were also involved in the crimes but prosecutors decided not to indict them because they testified against the defendants and provided important evidence.

Originally prosecutors were just investigating Hu. But in the course of their investigation they discovered that both Tung Ching-yun and Miao had -- unknown to both Hu and each other -- been using similar means of syphoning off money. For purposes of efficiency, prosecutors decided to combine all three cases.

"These six people allegedly embezzled approximately NT$20 billion from the company (Pacific Electric). [The offences] are not related to each other but they used the same scenario to commit the crimes," Lin Bang-liang (林邦樑), spokesman for the Taipei District Prosecutors' Office said.

Prosecutors' investigation showed that Hu took his position at Pacific Electric as the chief financial officer from 1993 to 1998 and established at least 146 subsidiary companies in Hong Kong and Virgin Islands. However, these 146 "subsidiary companies" were all dummy accounts which Hu used to carry out money laundering for the funds he stole from Pacific Electric.

On July 14 this year, Chu interrogated three employees of one subsidiary company that Hu established in Hong Kong. Prosecutors said that they got in touch with them in May and they were encouraging the three witnesses to fly to Taiwan and testify in court. However, Chu decided to fly to Hong Kong in person because these three witnesses refused to fly to Taiwan due to a fear of being charged, indicted or detained by the nation's judicial officers over their involvement in the case.

Meanwhile, Hu also allegedly manipulated the company share price in the stock market which made many investors lose a lot of money.

In total, Hu was charged with having stolen approximately NT$17.1 billion during his time at the company.

During this period, the Tungs and Sun took turns working for the company as chairmen but prosecutors believed they knew nothing about Hu's alleged offences.

Although the former chairmen were not involved in Hu's alleged crime, they were indicted because of their negligence of the case that caused loss of the company and its shareholders.

In addition to Hu's alleged offences, prosecutors, however, claimed to have evidence that the head managers of the company committed crimes similar to Hu's.

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