Thu, Nov 23, 2006 - Page 1 News List

Prosecutors issue arrest warrant for Koo Jr

NO MORE EXCUSES Legal eagles finally lost their patience after the Chinatrust Financial chief failed for a second time to appear for questioning over his role in a financial deal

By Rich Chang  /  STAFF REPORTER

Taipei prosecutors yesterday decided to issue an arrest warrant for the vice chairman of Chinatrust Financial Holding Co, Jeffrey Koo Jr (辜仲諒), after he failed to appear for questioning a second time.

"On the first occasion Koo asked for an absence saying he was attending a two-month Eisenhower Fellowship program in the US, and yesterday he said he could not attend because of family reasons. Prosecutors cannot accept this excuse," Taipei District Prosecutors' Office spokesman Lin Jinn-tsun (林錦村) told a press conference yesterday.

Lin said Koo would be arrested at the airport when he enters the country.

Wanted List

Lin added that if prosecutors were unable to arrest Koo, they would place him on the wanted list.

Yesterday morning, Koo's lawyer requested an extension, but prosecutors decided they could not accept his request.

Prosecutors said Koo -- a defendant in a probe into the company's investment in Mega Financial Holding Co -- was subpoenaed on Nov. 7 and yesterday for questioning about his role in allegations that Chinatrust had invested in Mega Financial via structured notes in transactions through its Hong Kong branch.

Several of Chinatrust's senior executives were detained last month by prosecutors over their involvement in the scandal.

Prosecutors said the probe could lead to a variety of charges, including breach of trust, illegal trading and violation of the Banking Law (銀行法).

The Financial Supervisory Commission (FSC) has said that Chinatrust invested in Mega Financial through its Hong Kong branch, but later transferred those notes to another Hong Kong-based company, Red Fire Development Ltd.

Red Fire 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.

Front company

Prosecutors suspect that Red Fire is a front company for the Koo family. They are trying to determine whether anyone profited illegally from the Mega Financial deal.

Chinatrust yesterday said it did not know whether Koo Jr would return to Taiwan soon, or whether he was considering resigning as the firm's vice chairman and director.

Another Chinatrust director, Steven Cheng (陳俊哲), has also asked for three months' leave, citing problems with his shoulder.

The company is expected to hold its regular board meeting tomorrow. As of yesterday, proposals to re-elect the two board members have yet to be placed on the agenda, sources said.

Additional reporting by Jackie Lin

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