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Prominent chairman investigated in new scandal

Taipei prosecutors yesterday said that they have begun investigating a new scandal in which China Development Holding Corp Chairman Liu Tai-ying (劉泰英) may be involved.

"His alleged bad investment decisions between 1996 and 1997 resulted in great losses for the KMT, as he was then chairman of the party's Investment and Business Management Commission. We have begun to summon related personnel to outline the facts," Chen Hung-ta (陳宏達), the spokesman for the Taipei District Prosecutors' Office, said.

For his involvement in 12 separate corporate scandals, Taipei Chief Prosecutor Lin Jinn-tsun (林錦村) indicted Liu on charges of theft, corruption, breach of trust, document forgery and violating the Securities Transaction Law (證券交易法), the Corporation Law (公司法), the Money Laundering Control Law (洗錢防制法) and Business Accounting Law (商業會計法) and on June 6 suggested he serve a 16-year prison sentence.

The KMT used to be the majority shareholder of the Bank SinoPac. According to Chen, after Lin had indicted Liu, Lin discovered that during Liu's chairmanship at KMT's Investment and Business Management Commission during Lee Teng-hui's (李登輝) presidency, he allegedly gradually sold stocks of the Bank SinoPac, which belonged to the KMT, to Ruentex Corp Chairman Yin Yen-liang (尹衍樑).

He then took the income from the deal and invested it in the Pan Asia Bank (汎亞銀行).This was a bad investment decision which resulted in great losses for the KMT.

Lin summoned Yin as a witness early Friday evening. According to prosecutors, Yin said that Liu is his mentor but they did not do anything illegal.

Prosecutors estimated the KMT's losses at NT$80 billion.

According to prosecutors' investigations, a Bank SinoPac share cost NT$30 between 1996 and 1997 but Liu sold these stocks to Yin at a price of less than NT$20 a share.

In addition, after Yin bought the stocks from Liu and became the majority shareholder of Bank SinoPac, he immediately decided to merge the bank with the National Securities Corp and established a new company called SinoPac Holding Corp.
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