Investigators yesterday raided the head office of Chinatrust Financial Holding Co in Taipei and seized a number of documents relating to Chinatrust's involvement in a controversial investment in Mega Financial Holding Co.
Taipei Prosecutor Tseng Yi-sheng (
The MJIB also summoned Chinatrust's chief legal adviser Deng Yan-dun (
At press time last night, they were still being questioned by MJIB agents.
"To facilitate the investigation, investigators decided to raid Chinatrust's offices and subpoena its top officials," Taipei District Prosecutors' Office Spokesman Lin Jinn-tsun (
Prosecutors are also expected to subpoena Jeffrey Koo Jr (
Koo Jr stepped down on July 21 as chairman and director of the board of Chinatrust Commercial Bank over the controversial Mega Financial deal.
Prosecutors said the investigation might lead to charges including breach of trust, illegal trading and violation of the Banking Law (
The nation's financial regulator, the Financial Supervisory Commission (FSC), says that Chinatrust had invested in Mega Financial via structured notes transacted through its Hong Kong branch, but later transferred those notes to another Hong Kong-based company, Red Fire Development Ltd.
The Hong Kong firm later cashed in the structured notes, making a profit of more than US$31 million. The money was returned to Chinatrust after intervention by the FSC.
Prosecutors suspect that the Hong Kong firm is a front company controlled by the Koo family and are endeavoring to determine whether anyone has profited illegally from the Mega Financial deal.
Chinatrust Financial chairman Jeffrey Koo Sr (
He said that he was very worried about his eldest son, Jeffrey Koo Jr, being drawn into the investigation.
"I believe our actions [in conducting the investment] were honorable and honest, and we will fully cooperate with investigations," he said. "I believe that the impartiality of the judiciary and the results [of the probe] will help clear our names."
Koo Sr returned to Taiwan yesterday morning from the US. He declined to comment on the relationship between Chinatrust Financial and Red Fire, which is registered in the Virgin Islands.
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