Fri, Jul 18, 2014 - Page 3 News List

Nankang executive detained in alleged kickback conspiracy

By Chiu Chun-fu, Chien Li-chung and Jason Pan  /  Staff reporters, with staff writer

An executive at Nankang Rubber Tire Corp has been held on suspicion of receiving NT$1.5 billion (US$50 million) in kickbacks from the firm’s suppliers.

Chen Chi-ching (陳啟清), 64, was detained and questioned yesterday at the Taipei District Prosecutors’ Office.

Chen was in charge of procurement in his role as assistant general manager of the materials department at Nankang Rubber Tire, a publicly listed company which manufactures tires and other rubber products.

The company is touted as the largest tire producer in the nation, with its brand of performance tires exported to more than 100 markets worldwide.

When prosecutors and police units searched Chen’s house in Hsinchu City on Wednesday, they reportedly uncovered more than NT$200 million stuffed into suitcases and boxes, officials said. Prosecutors also took away receipts, bank account statements, purchase orders and other papers as evidence, they said.

A spokesperson at the prosecutors’ office said Chen is suspected of demanding kickback payments from rubber materials suppliers, starting in 1997.

“One supplier [allegedly] initially had to pay Chen US$7 for the sale of 1 tonne of natural rubber material, which was raised to US$40 per tonne later on. Chen [allegedly] received about NT$230 million in total from just this supplier alone,” the spokesperson said, adding that “Chen went around to all the rubber suppliers for price comparisons and jacked up the kickback amount. From more than a dozen suppliers, we estimate Chen received about NT$1.5 billion in overall kickbacks.”

Chen’s wife, Chang Yue-chiao (張月蕉), was also detained, as a suspected accomplice.

Prosecutors said Chen opened a US dollar bank account in Mauritius, an African island nation in the Indian Ocean known as a tax haven for foreigners.

Officials said that Chen’s wife was thought to be responsible for making telephone calls to suppliers and trading companies with instructions on making wire deposits to the Mauritius account, which prosecutors said has a balance of more than US$3 million.

Chen and his wife have been charged with money laundering and breach of trust, as well as with violating the Securities and Exchange Act (證券交易法).

The alleged activities came to light when Nankang Rubber Tire chairman Chiang Ching-hsing (江慶興) found his company’s materials procurement deals always ran up higher costs than other competitors in the tire business.

Chiang, a retired policeman, talked with suppliers and found that Chen had allegedly taken advantage of his position to demand kickbacks.

Authorities said the stash of NT$200 million found in Chen’s home was transported to a bank for verification, then taken for storage at the National Treasury yesterday.

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