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Former presidential aide questioned over scandal

Former Presidential Office deputy secretary-general Ma Yung-cheng, right, is accompanied by a police officer yesterday on his way to the Taipei District Prosecutors' Office, where he was questioned over his possible role in an insider trading scandal. PHOTO: CNA

Former Presidential Office deputy secretary-general Ma Yung-cheng (馬永成) was summoned for questioning yesterday by prosecutors investigating allegations of corruption in the process of appointing the chairman of Taiwan Development Corp (TDC). Ma was later released.

Taipei District Prosecutors' Office spokesman Lin Pang-liang (林邦樑) said Ma is a witness in the investigation.

The questioning was part of a probe into a snowballing scandal involving President Chen Shui-bian's (陳水扁) son in-law Chao Chien-ming's (趙建銘) alleged insider trading of TDC shares.

"We summoned Ma to better understand the process by which Su Teh-jien (蘇德建) was appointed as TDC chairman," Lin said.

Former finance minister Lin Chuan (林全), summoned for questioning last week, told prosecutors that the appointment of Su was not his decision, adding that Ma had called him several times on the phone to discuss the appointment with him.

Prosecutors then decided to bring in Ma for questioning.

Lin said prosecutors hoped to learn whether Ma represented the Presidential Office when he made the suggestion about the appointment, or whether he acted on his own, implying a potential conflict of interest or involvement in corruption.

Last August, the state-owned Bank of Taiwan organized a syndicated loan totaling NT$16.5 billion (US$515.1 million) for TDC. The deal, which involved 29 banks, was overseen by the Ministry of Finance.

Prosecutors doubt the legitimacy of the syndicated loan, given TDC's capital of NT$3 billion (US$94 million). They also suspect that the terms of the loan agreement were flawed and that it should never have been approved.

The loan is at the center of the investigation into alleged insider trading involving Chao. Prosecutors suspect that Chao gained inside information about the loan, and then purchased TDC shares through an account held by his mother. Chao then profited when TDC's share price soared after the loan was made public.

Su, a former official of the Bank of Taiwan, was appointed TDC chairman on June 1 last year. Prosecutors suspect that bribery may have been involved in Su's appointment, which was approved by the ministry.

Meanwhile, the chairman of state-run Taiwan Cooperative Bank, Sean Chen (陳沖), a former vice minister of finance, was also summoned for questioning as a witness for the prosecution yesterday.

Prosecutors suspected that a NT$27 million (US$841,700) deposit into the bank account of Chao's father was a bribe for Chao's help in aiding the president of Nice Group Chen Jer-fang (陳哲芳) win the leadership of Waterland Financial Holdings Co last year.

Prosecutors alleged that Chao had made several phone calls to Sean Chen, asking Taiwan Cooperative Bank, which has a substantial stake in Waterland, to cast its vote in favor of Chen Jer-fang for chairmanship of Waterland. However, the bank's representative did not vote for Chen Jer-fang.

Sean Chen was later released.
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