Deputy Legislative Speaker Hung Hsiu-chu (洪秀柱) and Minister of Economic Affairs Shih Yen-shiang (施顏祥) yesterday faced allegations of involvement in a case of investment fraud in which a Los Angeles company demanded US$60 million in compensation from the Taiwanese government.
Jack Qin (秦杰), founder and chairman of Los Angeles-based EFT BioTech Holdings Inc, told a press conference in Taipei yesterday that Hung and Shih were the two key people “behind the collusion” orchestrated by Excalibur International Marine Corp (華達國際海運), a Taipei-based shipping company led by former Straits Exchange Foundation secretary-general and vice chairman Chiao Jen-ho (焦仁和), who then served as president of the corporation.
Hung and Shih deny any involvement.
Qin sued Chiao in late 2009 in the Shilin District Court in Taipei for compensation after he claimed to have discovered that Chiao did not follow through with a US$15 million down payment for two cruise ships from Marinteknik Shipbuilders PTE Ltd in Singapore, as a result of which Qin said he lost about US$30 million.
After Qin accused Chiao of fraud and violating the Company Act (公司法), prosecutors decided not to indict because they said Chiao was not the true decisionmaker at Excalibur International Marine Corp and did not control policy regarding the two cruise ships.
The corporation applied to -increase its capital by NT$470 million (US$15.9 million) following an announcement that it would invest in two cruise ships in June 2007.
Qin said that the Ministry of Economic Affairs approved the application in just two hours because Chiao was backed by Hung, adding that Shih was also involved in the fraud because he yielded to pressure not to revoke approval of the increase in capital.
In return for Hung’s help, Chiao gave her 300,000 shares valued at NT$3 million (US$101,000), Qin said.
Shih denied the allegations, saying he knew nothing of the case and that Hung had never taken up any issue related to the case with him.
Hung said she had no choice but to file a lawsuit against Chiao, an old friend she has known since her college days four decades ago, because he had acted on his own initiative when depositing the shares in her name four years ago.
The deputy speaker said she did not know that the shares were registered in her name until two years ago, when her legislative office received notices of shareholders’ meetings.
Hung said she thought Chiao would have already taken the shares back because she had told him to do so on several occasions.
Chiao admitted depositing the shares under Hung’s name without her knowledge, but denied that there were any irregularities involved in the increase of capital.
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