In view of his successes in investing in China, the ChinFon Commercial Bank (慶豐銀行) is urging Tsay Chern-nan (蔡辰男), chairman of the Cathy Trust Group (國泰信託集團), to be honest about his financial condition and to act to resolve its massive debts in Taiwan.
Tsay, who has made large investments in Dalian, China in recent years, owes NT$6 billion, interest not included, to the ChinFon Bank and has delayed payments since 1999.
In a court hearing on the dispute yesterday, Judge Cheng Li-yen (
"It confuses me a lot that he is unable to pay the debts while making such big investments in China. This kind of behavior is quite unacceptable to me and I think he'd better give me a good reason, " the judge said.
In 1985, Tsay's brother Tsay Chern-chou (蔡辰洲) whipped up a controversy in Taiwan when he embezzled over NT$7.8 billion from the Tenth Cooperative (十信). Tsay Chern-nan himself was then found to have borrowed over NT$18 billion from his own Cathy Trust.
As the trust company faced a bankruptcy crisis, the Ministry of Finance took over the bank and re-organized it into today's ChinFon Bank in 1988. The ChinFon Bank then inherited from the Cathy Trust the billions in debts incurred by Tsay.
Tsay's collateral to the bank is his wide stretches of land in Hsintien (
During the period between 1988 and 1999, Tsay made payments to the bank on an irregular basis by selling off his land.
However, the sloping land has become very difficult to sell in the wake of a series of mudslide disasters in the past few years and therefore Tsay has been forced to halt most of his real-estate development projects.
Tsay's lawyer Lin Ching-miao (
Lin said his client delayed the payment because of a continuing slowdown in his business. "He has no other revenues to pay [the debts] other than sales of the land," the lawyer said.
Lin also denied that Tsay is making investments in China, claiming that he works for foreign firms as a project manager. Nevertheless, Tsay himself has talked much about his investments in shopping malls, villa constructions and department stores in China during interviews with media.
Fan Kuang-yi (
"And we're wondering if he's using the outside-Taiwan investments to dodge the billions in debts to Taiwan creditors," Fan said.
Fan said ChinFon has taken action to enforce the payment of NT$78 million of Tsay's debts to the bank and they want Tsay to be more honest in the future and to act to resolve his financial problems.
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