Thu, May 25, 2006 - Page 1 News List

Prosecutors haul in president's in-laws for questioning

SHARE SCANDAL Prosecutors questioned five members of the Chao family, trying to determine whether they were aware of a syndicated bank loan before buying TDC shares

By Rich Chang  /  STAFF REPORTER

President Chen Shui-bian's (陳水扁) son-in-law and four members of his family were summoned for questioning by Taipei prosecutors yesterday over their alleged involvement in insider trading of Taiwan Development Corp (TDC) shares.

The company's chairman, Su Teh-jien (蘇德建), was also detained after questioning.

"President Chen's son-in-law, Chao Chien-ming (趙建銘), Chao's father Chao Yu-chu (趙玉柱), his mother Chien Shui-mien (簡水綿), and Chao's younger brother Chao Chien-hsun (趙建勳) and his wife were questioned," said Taipei District Prosecutors' Office spokesman Lin Pang-liang (林邦樑) .

They are defendants in the investigation, Lin said.

Chien, Waterland Securities Co board director Tsai Chin-wen (蔡清文) and businessman Yu Shih-yi (游世一) bought large numbers of TDC shares after the Chang Hwa Commercial Bank released them, and they made substantial profits when TDC shares rose abruptly after the firm received a syndicated loan from a conglomerate of banks that included Chang Hwa Commercial Bank.

Lin had said prosecutors were trying to discover whether Chao and the others knew about the loan when they decided to buy TDC shares from the bank.

The scandal dates back to last summer when Su Teh-jien, Chang Hwa Commercial Bank chairman Chang Po-shin (張伯欣), bank president Chen Chen-chao (陳辰昭) and another bank official dined with Chao Chien-ming, Tsai and Yu at a Japanese restaurant in Taipei on two separate occasions.

Officials suspect that the seven discussed the trading of TDC shares on both occasions.

After the meetings, Chao's mother, Tsai and Yu reportedly bought large numbers of TDC shares that had been released by the bank.

Chao Chien-hsun and his wife also reportedly bought TDC shares after learning from insiders that their value would increase.

Tsai and Yu have been detained by the Taipei District Court.

Chien, Chao Chien-hsun and his wife were released later last night, while Chao Yu-chu and Chao Cheng-ming were still being questioned at press time. Chien was swamped by reporters and hit on the head by a camera. He was then taken to National Taiwan University Hospital for an examination.

Meanwhile, the United Daily News, a local Chinese-language newspaper, yesterday reported prosecutors discovered that in last August Tsai deposited a total of NT$27 million (US$843,000) into the bank accounts of Chao's parents and brother; funds that were then transferred to Yu's bank account.

The report said the money was used to invest in two land development proposals which might have involved insider trading, but prosecutor spokesman Lin refused to comment yesterday on the report.

President Chen said in a statement last night that he would not seek to hide any wrongdoing of the Chao family and would accept the result of the investigation.

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