Jeffrey Koo Jr (辜仲諒), a major shareholder of CTBC Financial Holding Co (中信金), was released yesterday morning on bail of NT$100 million (US$3.10 million) after being questioned overnight by prosecutors.
A number of CTBC executives and other suspects were also released as a judicial probe into alleged illegal financial dealings involving several of the nation’s leading financial companies and executives continued.
Gobo Group (國寶集團) president Chu Guo-rong (朱國榮), reportedly a major financial backer of the Chinese-language weekly magazine The Journalist (新新聞), remained in custody at press time last night.
Photo: Wang Yi-sung, Taipei Times
The Taipei District Court approved a request by prosecutors that Chu be held incommunicado. Prosecutors said Chu played a major role in the alleged financial irregularities and might tamper with evidence if he is released.
The Special Investigation Division (SID), a unit of the Supreme Prosecutors’ Office in charge of major corruption and economic crimes, headed up the probe into four cases of insider trading, profiteering on real-estate transactions and illegal transfers of company funds.
Two other people involved in the case, both of whom work for CTBC, were also released on bail and barred from traveling overseas.
Photo: Wang Yi-sung, Taipei Times
In addition to being a major shareholder, Koo is responsible for CTBC’s day-to-day management. He is also the chairman of Chinatrust Charity Foundation (中信慈善基金會) and the owner of Chinatrust Group’s Brothers Baseball Club (中信兄弟), a team in Taiwan’s professional baseball league.
Koo was released at about 5:20am yesterday after 14 hours of questioning. He faces charges of violating the Banking Act (銀行法) and the Securities and Exchange Act (證券交易法), and is banned from traveling abroad.
Showing signs of fatigue, Koo said to the throng of reporters: “This is all a misunderstanding,” and that he did not know why he was questioned for so long.
As Koo walked to a car waiting to pick him up, he asked: “Did our baseball team win or lose last night?”
The Brothers lost 22-9 to the Lamigo Monkeys on Wednesday.
When the bail for NT$100 million was announced, the Koo family and CTBC staff gathered the money in about 40 minutes and delivered it to the SID’s office in three cases at about 4:20am.
Koo Jr was involved in another financial scandal relating to Chinatrust Bank’s (the former name of CTBC Bank) purchase of a stake in Mega Financial Holding Co (兆豐金控), and fled the country in 2006. He stayed in Japan as a fugitive and returned in 2008.
The Taipei District Court in October 2010 found Koo and several senior executives guilty of illegal financial transactions, including using Red Fire Developments (紅火公司), an offshore shell company set up by Chinatrust’s Hong Kong branch, to pocket more than US$30 million. Koo was sentenced to nine years in prison; the case is under appeal.
On Wednesday, SID officials raided 58 offices and residences across the nation to gather evidence, while summoning 94 people for questioning, either as suspects or witnesses.
The SID said that from 2003 to 2007, CTBC Financial illegally transferred company assets worth about US$300 million into accounts controlled by Koo on the pretext of investing in subsidiaries.
Prosecutors said board members or employees of CTBC Financial might have formed a shell company to partner with Chong Hong Construction Co (長虹建設) to purchase a plot of land in Taipei’s Neihu District (內湖) to construct an office building.
Prosecutors said collaborators in the deal sold the land to the financial holding company’s banking unit, CTBC Bank Co Ltd (中國信託銀行), for more than NT$5 billion and pocketed the difference.
SID officials said Gobo Group might have been involved in stock speculation and insider trading since January last year, generating more than NT$100 million in illicit profits.
Additional reporting by CNA
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