Tue, Jul 09, 2013 - Page 3 News List

Koo Jr appeals prison term to Supreme Court

NOT GUILTY:The attorney of the disgraced former Chinatrust Financial Holding Co executive said his client is appealing against his sentence to defend his innocence

By Rich Chang  /  Staff reporter

Former Chinatrust Financial Holding Co vice chairman Jeffrey Koo Jr (辜仲諒) yesterday appealed to the Supreme Court to overturn a ruling by the Taiwan High Court sentencing him to nine years and eight months in prison for the company’s illegal purchase of a stake in Mega Financial Holding Co under his tenure.

Koo’s attorney, Eric Yeh (葉建廷), said his client filed the appeal to defend his innocence.

In addition to the jail time, the High Court on May 31 also fined Koo NT$150 million (US$5 million).

The High Court found that Koo had violated the Securities Exchange Act (證券交易法) and the Banking Act (銀行法) when he 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 Chinatrust’s board.

The deal included the illegal purchase of US$390 million in loan notes, convertible into Mega shares, using money earmarked for deposits, the ruling said, adding that profits from the transaction were made 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 that Red Fire Developments, which was capitalized at US$1, was set up in Hong Kong under Koo’s instructions.

Koo made US$30.47 million in profit from the illegal trading and did reinvest in the company, it said.

Meanwhile, the Supreme Prosecutors’ Office Special Investigation Division said that since it found the High Court’s ruling fair and in accordance with the facts of the case and the law, it would not petition the Supreme Court for a new sentence.

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