The Special Investigation Division of the Supreme Prosecutors’ Office yesterday indicted Jeffrey Koo Jr (辜仲諒) and other executives of CTBC Financial Holding Co (中信金) for allegedly embezzling company funds and other illegal financial dealings involving the several of the nation’s large conglomerates and their subsidiaries.
Wrapping up an almost five-month investigation, prosecutors indicted Koo and seven others for violating the Securities and Exchange Act (證券交易法), the Money Laundering Control Act (洗錢防制法) and the Insurance Act (保險法).
Koo was charged with four counts of embezzlement, three of which involved transferring a combined US$300 million from CTBC Financial to accounts controlled by Koo and his father, Jeffrey Koo Sr (辜濂松), from 2004 to 2007.
Prosecutors said the Koos teamed up with other CTBC Financial executives to make the transfers.
The seven others indicted were former CTBC Financial chief financial officer Perry Chang (張明田), CTBC executives Wu Feng-fu (吳豐富), Chang Yu-chen (張友琛), Chang Su-chu (張素珠) and Steven Chen (陳俊哲), Koo Sr’s son-in-law, as well as Gobo Group (國寶集團) president Chu Guo-rong (朱國榮) and his assistant, Lin Kui-hsin (林桂馨).
In one of the cases cited by prosecutors, the Koos pocketed a combined US$27 million in a deal in which they used CTBC Financial’s money to buy property in Beijing, adding that Koo Jr used some of the funds to buy property in Taipei’s Tianmu (天母) area.
As Koo Sr died in December 2012, prosecutors said they had dropped the charges against him.
“We are disappointed about the indictment. The prosecutors provided updates to the media over the course of the investigation and we regret such actions. We shall provide evidence to prove our innocence in the upcoming court hearing,” Koo Jr said in a statement issued by his lawyers.
The statement said that CTBC Financial had already stated that the company did not suffer any loss during the aforementioned period and that it had even made a profit.
“Therefore no embezzlement, and no breach of trust had taken place. Jeffrey Koo Jr again expresses his regret over the prosecutors’ decision to press charges without properly investigating the facts of the case,” the statement said.
It said Koo Sr had been an ambassador-at-large for the government, conducted diplomatic missions around the world and “that we were astounded to learn that Koo Sr had also been charged with embezzlement in the case, as he does not have the opportunity to defend himself.”
The other case for which Koo Jr was indicted involved the use of funds from the group’s insurance arm, CTBC Life Insurance Co (中信人壽), to purchase real estate from Gobo Group at an unfairly high price in 2014 and last year, which helped Gobo profit from the deal.
Prosecutors said the purchases were to secure Chu’s support for CTBC Financial’s merger with Taiwan Life Insurance Co (台灣人壽).
Chu was one of Taiwan Life’s major shareholders at the time.
Koo Jr serves as chairman of the Chinatrust Charity Foundation, but prosecutors said he has long been the person responsible for CTBC Financial’s day-to-day operations, including during the time the funds were allegedly embezzled.
Koo Jr is also the owner of Brothers Baseball Club, a team in the nation’s professional baseball league, which he bought from its previous owners for NT$400 million in 2013.
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