Mon, Nov 20, 2006 - Page 3 News List

Taipei prosecutors may arrest Koo Jr. if he fails to show


Taipei prosecutors said yesterday that Jeffrey Koo Jr. (辜仲諒), the vice chairman of Chinatrust Financial Holding Co, could be arrested or listed as wanted should he fail to appear at the Taipei District Prosecutors' Office on Nov. 22 for questioning regarding an alleged bank management buyout scandal.

Prosecutors said Koo -- a defendant in an investigation into the company's investment in partially government-controlled Mega Financial Holding Co -- had been subpoenaed on Oct. 26 and Nov. 2 for an interview over his role in allegations that Chinatrust had invested in Mega Financial via structured notes transacted through its Hong Kong branch.

Koo did not appear in court on Nov. 7 as requested, saying he was attending a two-month-long Eisenhower Fellowship program in the US.

Koo will avoid arrest if he returns to Taiwan before or on Wednesday, prosecutors said.

Several of Chinatrust's senior executives were detained last month by investigators probing allegations that Chinatrust had transferred the structured notes to another Hong Kong-based company called Red Fire Development Ltd, which cashed in the notes, making a profit of more than US$31 million.

The money was later returned to Chinatrust.

Prosecutors suspect that Red Fire is a front company controlled by the Koo family and were trying to determine whether any individuals have made illicit profits.

After detaining Chinatrust's senior executives, the prosecutors next want to question Koo Jr.

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