Mon, Jan 08, 2007 - Page 3 News List

Rebar chief fled to China before insolvency claims

SLIPPING THE NET?Prosecutors said they were banning the chairman of the troubled Rebar Group from leaving the country, but immigration officials said he's gone

By Rich Chang  /  STAFF REPORTER

From left to right, Banking Bureau Director-General Gary Tseng, Financial Supervisory Commission Chairman Shih Jun-ji, Vice Minister of Finance Ho Chih-chin, central bank Governor Perng Fai-nan and Vice Minister of Finance Liu Teng-cheng hold a press conference at General Information Office yesterday to reassure depositors of The Chinese Bank.

PHOTO: CNA

The chairman of a troubled conglomerate at the center of an emerging financial scandal is reported to have fled to China with his wife late last month, even as prosecutors yesterday announced they were launching an embezzlement investigation.

On late Saturday, investigators said they were prohibiting Rebar Group chairman Wang You-theng (王又曾) and his family members from leaving the country, as they started to investigate whether or not the family had embezzled assets from the Rebar Group.

Immigration authorities reported that Wang and his wife Chin Shyh-ying (金世英) flew to Hong Kong on Dec. 30.

The couple and three of their sons, Wang Lin-i (王令一), Wang Lin-tai (王令台) and Wang Lin-chiao (王令僑), two of their daughters, Wang Lin-ke (王令可) and Wang Lin-mei (王令楣), and Wang You-theng's younger brother, Frank Wang (王事展), were prohibited from leaving the country on Saturday, the Ministry of Justice's Investigation Bureau said yesterday.

Wang You theng's remaining son, Eastern Multimedia Group chairman Gary Wang (王令麟) was not on the list.

Although China and Taiwan have a very low-key extradition program, it is almost invariably reserved for petty or violent criminals. It is rare, if not unprecedented, for people suspected of white-collar crimes or corruption to be returned to Taiwan.

Both China Rebar (中國力霸) and Chia Hsin Food & Synthetic Fiber Co (嘉新食品化纖), both under the parent Rebar Asia-Pacific Group (力霸亞太企業集團), filed applications for insolvency protection on Dec.29.

However, the firms delayed notifying the Taiwan Stock Exchange Corp of their insolvency claims immediately -- as required under financial regulations -- postponing notification until Thursday.

On that day, the companies' request to the Taipei District Court for insolvency protection was approved, paving the way for corporate restructuring.

Because of the delay in notification, the stock exchange fined each company NT$50,000 (US$1,530), asserting that the companies had withheld critical information from investors.

Taipei District Prosecutors' Office Spokesman Lin Jinn-tsun (林錦村) said investigators want to know whether or not Rebar Group officials had used the period between filing for insolvency protection and notifying the stock exchange to embezzle assets from the group.

In the meantime, financial regulators and investigators also found that China Rebar had bought 8.2 million shares of Asia-Pacific Broadband Telecom Co (亞太固網) through its seven affiliates during a period of financial difficulty last September.

The deal was worth NT$73.4 million (US$2.3 million).

Investigators suspect that Asia-Pacific Broadband Telecom Co may have illegally profited through the trade.

Investigators will also probe whether assets from The Chinese Bank (中華銀行), one of the group's affiliates, had been embezzled, Lin added.

A run on the bank on Friday first brought the quickly-expanding scandal into the public's eye. The government's Central Deposit Insurance Corp (中央存保) was forced to intercede, and took over The Chinese Bank at midnight on Friday.

Meanwhile, the Financial Supervisory Commission announced that the state-controlled Taiwan Cooperative Bank (合作金庫銀行) and the private Cathay United Bank (國泰世華銀行) would take over the financially strapped Great Chinese Bills Finance Corp (力華票券), 70 percent held by the Rebar Group.

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