Sat, Jul 02, 2005 - Page 2 News List

FSC director linked to scandal

CORRUPTION Lee Chin-chen, an official with the very agency tasked with policing the nation's financial activities, is almost certainly linked to illegal trading, authorities say

By Rich Chang  /  STAFF REPORTER

Prosecutors said yesterday they were "almost sure" that the note found at the office of Lin Ming-da (林明達), a private investor and prime suspect in the Power Quotient (勁永國際) illegal trading scandal, was written by the director-general of the Financial Supervisory Commission, Lee Chin-chen (李進誠). The note requested the borrowing of money against shares of the company.

Prosecutors detained Lin on June 23 in connection with the illegal trading case, but he was later released on bail.

Investigators have challenged the investor's release.

"We appealed the decision to grant Lin bail to the Taiwan High Court late Thursday night and they granted the appeal," said Lin Pang-liang (林邦樑), a spokesman for Taipei Prosecutors' Office.

"The Taipei District Court will thus re-consider the bail hearing," he said.

Prosecutors had shown evidence to the Taiwan High Court and Taipei District Court indicating that Lin had close connections with Lee, and that they might have been involved in illegal trading together, Lin Pang-liang said.

As of press time, the Taipei District Court had yet to announce its decision on Lin's release. Chinese language media reports said the grant of the prosecutors' appeal did not bode well for the FSC director-general.

Premier Frank Hsieh (謝長廷) yesterday said that as far as he knew, Lee had yet to be named a defendant in the case.

Prosecutors also said yesterday they had evidence that Lee had dinner with Lin, and the two frequently talked together on the phone.

If the evidence is true, it refutes Lee's earlier claim that he knew Lin only vaguely and had been in contact with him a couple of times.

Authorities also said the letter in question contained Lee's bank account details and a list of shares of several companies currently under investigation by the FSC's Examination Bureau -- of which Lee is the director-general.

Prosecutors were probing whether Lee had been in touch with people thought to be directly involved in illegal trading in recent months.

The Taipei Prosecutors' Office in January launched an investigation into Power Quotient International after it discovered suspicious 2004 revenue figures.

While they were investigating the anomalies, Lin borrowed money against Power Quotient International Co and made substantial profits, prosecutors said.

Prosecutors suspected that FSC officials were leaking information to Lin, two reporters and individual stock market investors -- all of whom are suspected of involvement in illegal trading.

When they discovered the suspicious note allegedly written by Lee on June 23, prosecutors decided to launch an investigation against him.

The Black Gold Investigation Center said previously that there was a group illegally profiting from stock movements. They added that officials from The Ministry of Justice were linked to the illegal trading.

The prosecutors had said that some of the officials aroused suspicion by leaking the results of their investigations to specific reporters. By the time the stories were published, individual investors had already borrowed substantial amounts of money from or bought shares in companies under investigation. The members of the group then allegedly shared the illegal profits.

Also see story:

FSC task force to probe trading scandal

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