Sat, Jun 01, 2013 - Page 3 News List

High Court hands Koo Jr new prison sentence

DOING TIME:The new sentence came about after Jeffrey Koo Jr appealed an October 2010 verdict that sentenced him to nine years in prison for financial crimes

By Rich Chang  /  Staff reporter

Former Chinatrust Financial Holding Co (中信金控) vice chairman Jeffrey Koo Jr (辜仲諒) was yesterday sentenced to nine years and eight months in prison by the Taiwan High Court over his company’s illegal purchase of a stake in Mega Financial Holding Co (兆豐金控).

In October 2010, Koo was sentenced to nine years in prison by the Taipei District Court.

The High Court yesterday sentenced Koo to nine years and eight months in prison and fined him NT$150 million (US$5 million).

Koo can appeal the ruling to the Supreme Court, the High Court said.

In the ruling yesterday, the court said Koo had violated the Securities Exchange Act (證券交易法) and the Banking Act (銀行法).

According to the ruling, Koo and several company executives used NT$27.5 billion to buy a 9.9 percent stake in Mega Financial through a Hong Kong branch of Chinatrust in 2004, without the approval of the Chinatrust board.

The deal included the illegal purchase of US$390 million in loan notes, convertible into Mega shares, using money earmarked for deposits, it said, adding that profits from the transaction were locked in through insider trading.

The case, dubbed the Red Fire Case after the name of the offshore company used to conduct the operation, surfaced following prosecutors’ investigations into a bid by Chinatrust Financial to take over Mega Financial.

The ruling said Red Fire Developments, capitalized at US$1, was set up in Hong Kong under Koo’s instruction. Koo made US$30.47 million in profit from the illegal trading and did not return the profit to his company, it said.

“Koo made Red Fire Developments his private treasure and used it to collect illegal profits. Those illegal actions harmed Chinatrust and the principle of fairness in the local market,” the ruling said.

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