Tue, May 23, 2006 - Page 1 News List

Home, office of Chen's in-laws raided

WIDENING NET Investigators also questioned Chao Chien-ming's parents in Tainan County about their possible involvement in an insider trading scandal

By Shih Hsiu-chuan and Rich Chang  /  STAFF REPORTERS , WITH CNA

Investigators yesterday raided the office and residence of President Chen Shui-bian's (陳水扁) in-laws on suspicion that they were involved in the scandal relating to the alleged insider trading of Taiwan Development Corp (TDC) shares.

Taipei District Prosecutors' Office spokesman Lin Pang-liang (林邦樑) said investigators questioned the parents of Chen's son-in-law, Chao Chien-ming (趙建銘), at their residence in Tainan County about the purchase of TDC stock. Investigators had seized a number of documents during the raids, Lin said.

Prosecutors will formally summon the couple, Chao Yu-chu (趙玉柱) and his wife, Chien Shui-mien (簡水綿), for questioning soon, Lin said. He refused to say when Chao Chien-ming might be called in for questioning, saying only that he would be summoned at an "appropriate time" if necessary.

A summons is expected within a few days.

The scandal dates back to last summer when TDC chairman Su Teh-jien (蘇德建), Chang Hwa Commercial Bank chairman Chang Po-shin (張伯欣) and bank president Chen Chen-chao (陳辰昭) dined with Chao Chien-ming, Waterland Securities Co board director Tsai Chin-wen (蔡清文) and businessman Yu Shih-yi (游世一) at a Japanese restaurant in Taipei on two occasions.

Officials suspect that the six discussed the trading of TDC shares on both occasions. After the dinners, Chao's mother, Tsai and Yu reportedly bought a large amount of TDC shares that had been released by the bank. Tsai and Yu have been detained by the Taipei District Court.

Chao Chien-ming has been accused of having his mother buy the shares so he could profit from inside information obtained at the dinners.

He has acknowledged the dinners and his mother's stock purchases, but denied involvement in any insider trading.

There have been rumors that Chao Chien-ming and his wife, Chen Hsing-yu (陳幸妤) canceled plans for a holiday in Japan that was to begin yesterday because travel restrictions had been imposed upon him.

However, as of noon yesterday Chao Chien-ming had not been barred from leaving the country, Lin said.

Meanwhile, government spokesman Cheng Wen-tsang (鄭文燦) told a press conference yesterday that the Executive Yuan would thoroughly investigate whether any government representatives were involved in the scandal. His remarks were the first time the Cabinet has commented on the case.

"As some people have doubted the legitimacy of the syndicated loan for TDC and Chang Hwa Bank's disposal of its TDC shares, we will probe," the matter in order to see if the accusations have any merit, he said.

The Chinese-language United Daily News yesterday reported that Premier Su Tseng-chang (蘇貞昌) has chosen to keep mum on the matter because he wants the president's support in his 2008 presidential election bid.

Last August the state-owned Bank of Taiwan organized a syndicated loan for TDC. News of the loan caused the price of TDC shares to skyrocket from around NT$2 to NT$18 within a year.

Chinese Nationalist Party (KMT) Legislator Chiu Yi (邱毅) has criticized Minister of Finance Joseph Lyu (呂桔誠) for organizing the loan, saying it was unreasonable for TDC, with its NT$3 billion (US$94 million) in capital, to obtain such a huge loan. Lyu sued Chiu last week over the accusation.

Chiu said Chang had committed a breach of faith.

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