Inventec Corp (英業達) founder Yeh Kuo-yi (葉國一) is out on NT$5 million (US$171,141) bail after being questioned by prosecutors over allegations of the manipulation of property prices and illegal acquisition of land for a luxury housing project.
The Taipei District Prosecutors’ Office had summoned Yeh and another 11 people on Thursday night to give statements on the matter, after which prosecutors said Yeh admitted to buying out houses so he could get reimbursed in a redevelopment deal.
Prosecutors also questioned Yeh’s wife and two sons. His wife, Wang Fu-tai (王富代), was released on NT$1 million bail, while his eldest son, Yeh Li-chuan (葉力銓), and second-eldest son, Yeh Li-cheng (葉力誠), were released on NT$500,000 bail each.
When Yeh left the prosecutors’ office late on Thursday night, he said told reporters that the case was a matter of personal investment and had nothing to do with Inventec, a local contract PC maker.
Inventec said yesterday that the company’s operations would not be affected by the investigation.
The property transaction “is an investment made by the director of the company’s board. It has nothing to do with the company’s operations and will not affect the company’s business,” Inventec said in a filing to the Taiwan Stock Exchange yesterday.
According to a prosecutors’ office report, Yeh allegedly spent NT$800 million on purchasing 2,000 ping (6,611m2) of land near Chiang Kai-shek’s (蔣介石) Shilin Official Residence (士林官邸) in Taipei in 2000 and also gradually bought out aging residences in the nearby Guohua Street.
By 2004, Yeh had allegedly bought a total of 25 residences in the area, one of which he had bought with another person and shared ownership, and all were transferred to his wife’s name, the report said.
Soon after, the Taipei City Government designated the area to the north of the Shilin Residence stretching to the private Taipei High School a rezoning area. It began sector-by-sector expropriation in 2005 after entering into an agreement with local residents that the city government would be responsible for their relocation, the report said.
However, during the confirmation process of which owners would be relocated and recompensed in the expropriation, the city government discovered that Wang owned 25 residences in the rezoning area, which would have entitled her to a tidy sum, the report said.
Because such an occurrence was against the principle of residential justice, the report said, the city government made an emergency amendment to the regulations stipulating that reimbursement would be limited to the value of a single house per property owner.
Wang then announced that she would give up her claim on the residence of which she shared ownership with another person and keep one other house in her name. She allegedly sold the other 23 houses to dummy accounts at NT$185,000 per ping, with each dummy account buying a house averaging 50 ping, the report said.
The report added that the alleged dummy accounts had each applied for reimbursement for a house after the rezoning was complete.
Reimbursements were paid in March 2009. Barely six months later, the prosecutors’ office received a tip-off that Yeh was allegedly complicit in using dummy accounts to manipulate house prices in the area.
Yeh has a seat on Inventec’s eight-member board. Inventec posted a 36 percent decline in first-quarter net profits of NT$416 million, as economic weakness in Europe cut PC demand, compared with a profit of NT$647 million in the corresponding period of last year.
Inventec expected notebook computer shipments to regain growth momentum next quarter after a flat period this quarter, local Chinese-language newspaper the Economic Daily News reported last week.
The share price of Inventec closed up 0.87 percent at NT$11.60 yesterday, regaining some momentum from a 4.34 percent dive in early trading hours, after local media reported that Yeh and his family were bailed out.