Premier calls for calm as scandal worsens

With accusations flying between prosecutors and the Financial Supervisory Commission (FSC) over the widening scandal stemming from an investigation into illegal trading at Power Quotient, the nation's premier yesterday called for a truce.

"Premier Frank Hsieh (謝長廷) called for the two bureaus, the Financial Supervisory Commission and the Black Gold Investigation Center of the Taiwan High Court Prosecutors' Office, to calm down and not fight each other, and he hopes prosecutors could swiftly finish their investigation and release their findings to the public," Cabinet Spokesman Cho Jung-tai (卓榮泰) said yesterday.

Prosecutors at the Black Gold center yesterday said that they were clean and welcomed an investigation into their own conduct, after allegations from the FSC that some prosecutors may have been involved in the very illegal trading they were investigating.

"The prosecutors at the Black Gold Investigation Center have a good reputation and are absolutely clean. The prosecutors welcome the commission to look into them," said Hou Kuan-jen (侯寬仁), a prosecutor in charge of the case at the Black Gold Investigation Center yesterday.

The FSC says it has decided to form a task force to probe prosecutors at the Black Gold center. That move comes after Black Gold center prosecutors launched an investigation against the director-general of the Financial Supervisory Commission, Lee Chin-chen's (李進誠) possible involvement in the illegal trading.

Eric Chen (陳瑞仁), a prosecutor investigating the scandal, said he had suggested to FSC chairman Kong Jaw-sheng (龔照勝) that Lee should temporarily leave his position or take a long holiday so he would not be able to interfere with a probe into his own conduct. As the director-general of the FSC's Examination Bureau, Lee has the right to see documents that are being investigated by prosecutors.

But Kong said he needed to see more evidence before he removed Lee from his position, Chen added.

Prosecutors have said they are "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 illegal trading scandal, was written by Lee. The note requested the borrowing of money against shares of the company.

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

The scandal goes back to January, when The Taipei Prosecutors' Office and the Black Gold center launched an investigation into Power Quotient International after the discovery of suspicious revenue figures for last year.

While they were investigating the anomalies, Lin borrowed money against Power Quotient International Co and made substantial profits, prosecutors said. Prosecutors suspect that FSC officials may have leaked information to Lin, two reporters and individual stock market investors -- all of whom are suspected of profiting from illegal trading.

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