The Rebar Asia Pacific Group (力霸亞太企業集團) scandal continued to send shockwaves through the financial sector yesterday, as Taipei prosecutors raided another subsidiary of the conglomerate whose chairman is now a wanted fugitive.
Taipei prosecutors led more than 40 agents from the Ministry of Justice's Investigation Bureau (MJIB) on a morning raid of the headquarters of Asia Pacific Broadband Telecom (亞太固網). The 12-story building was thoroughly searched.
A number of documents and electronic records were seized and several individuals were questioned.
Taipei Prosecutors' Office spokesman Lin Jinn-tsun (
Three of Rebar chairman Wang You-theng's (王又曾) sons -- Asia Pacific Broadband Telecom vice chairman and president Wang Lin-tai (王令台), The Chinese Bank (中華銀行) vice president Wang Lin-chiao (王令僑) and Lawrence Wang (王令興) were summoned for questioning by prosecutors yesterday.
The questioning was still continuing at press time.
Lin Jinn-tsun said that six years ago Asia Pacific Broadband Telecom collected around NT$60 billion (US$1.83 billion) in bonds. Around NT$10.5 billion of this sum was paid to the government for access and licensing, while around NT$20 billion was used to pay for the company's own telecom infrastructure. Prosecutors believe the remainder -- around NT$29.5 billion -- was embezzled.
Officials at Asia Pacific Broadband Telecom are suspected of having lied to shareholders and misappropriated funds, Lin Jinn-tsun said.
Lin Jinn-tsun said that the headquarters of Rebar Asia Pacific Group, Chia Hsin Food and Synthetic Fiber Co (嘉新食品化纖), and The Chinese Bank were also searched once again in an effort to uncover more evidence.
Lin Jinn-tsun added that the seized items include computer discs, private notebooks, ledger books and transaction records.
Meanwhile, Asia Pacific Broadband Telecom said its operations would not be affected by the raid and subsequent investigation.
"The investigation does not and will not affect Asia Pacific Broadband Telecom's operations," said Wang Lin-tai.
Wang Lin-tai said that the company's 2,000 employees would continue to provide telecom services for consumers.
The group had NT$65.68 billion in initial capital, but spent about half of it on obtaining a third-generation (3G) license and building cellular base stations.
The company, which has been struggling to make a profit, said it plans to hold a special board meeting "sometime this week" under mounting pressure from major shareholders, including the state agency Taiwan Railway Administration (台鐵) and the state-controlled Mega Financial Holding Co (兆豐金控).
Thirty-eight board members are to discuss various issues, including nominating a new chairperson. Asia Pacific Broadband Telecom's chairwoman was Wang Chin She-ying (王金世英), who fled overseas with her husband Wang You-theng.
The telecom operator also owns 3G mobile service provider Asia Pacific Broadband Wireless Communications Inc (亞太行動寬頻) and Internet service provider Asia Pacific Online Services Inc (亞太線上).
Meanwhile, the raid on Asia Pacific Broadband Telecom's offices also raised suspicions about Eastern Broadband Telecom, the firm's predecessor.
Eastern Multimedia Group Chairman Gary Wang (王令麟) sold bonds to legislators and their staff in 2000 to raise funds for the establishment of Eastern Broadband Telecom, Democratic Progressive Party (DPP) Legislator Lin Chung-mo (林重謨) said.
"Aside from lawmakers, many legislative aides, supporters and reporters also bought the bonds," he said.
Lin said that most lawmakers bought bonds at NT$10 per share, and that many of them made huge fortunes by reselling the bonds later at higher rates.
The Rebar Group scandal had triggered a run on The Chinese Bank, a subsidiary, and the bank was found to have a high ratio of bad loans.
One legislator, requesting anonymity, said that some lawmakers had bought the bonds with money borrowed from The Chinese Bank, and still haven't repaid the money.
"That's why some lawmakers strongly oppose an amendment aimed at demanding banks disclose the names of debtors with large outstanding loans," DPP Legislator Huang Wei-cher (黃偉哲) said.
DPP Legislator Chang Hua-kuan (張花冠), the wife of former KMT Legislator Tseng Chen-nung (曾振農), said that she bought 2 million shares of Eastern bonds in 2000.
“I lost lots of money because of the investment,” Chang said, noting that she still has 170,000 shares, which she said had now become “useless wallpaper.”
Taipei County Commissioner Chou Hsi-wei (周錫瑋) was attacked by his rival during the county commissioner election because he had bought 300,000 of the bonds when he was a lawmaker.
Chou at the time responded that he didn't make any profits from the purchase, because he had donated all of the bonds to charity.
Minister of Economic Affairs Steve Chen (陳瑞隆) said yesterday that the ministry will watch Asia Pacific Broadband Telecom and other units of Eastern Multimedia Corp closely.
Chen made the remarks in the legislature's Economics and Energy Committee yesterday.
During the session, lawmakers criticized the investment in the money-losing Asia Pacific Broadband by state-controlled China Steel Corp (中鋼), Taiwan's largest steel maker.
Admitting that China Steel has booked losses from investing NT$1.6 billion in Asia Pacific Broadband Telecom in the past few years, Chen said it has required China Steel to evaluate the investment and ensure its interests.
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