Fri, Sep 01, 2017 - Page 3 News List

Supreme Court upholds jail for tycoon Jack Sun

EMBEZZLEMENT:PEWC’s former chairman colluded with his chief financial officer to illegally transfer NT$20 billion of the company’s assets to dummy firms abroad

By Jason Pan  /  Staff reporter

The Supreme Court yesterday upheld the guilty verdicts against former Pacific Electric Wire and Cable (PEWC) chairman Jack Sun (孫道存) and former chief financial officer Hu Hung-chiu (胡洪九) for embezzlement and illegal transfer of company assets, with Sun receiving three years and Hu 14 years and six months in prison.

It was the final ruling on the case, which has dragged on in courts for more than a decade.

Hu was also ordered to pay NT$1 billion (US$33.11 million) in fines for colluding with Sun to illegally transfer a total of about NT$20 billion in PEWC funds starting in 1994 to hide the assets in dummy companies abroad.

Earlier court decisions found the pair guilty of embezzlement and other offenses in contravention of the Securities and Exchange Act (證券交易法) and related financial regulations, as well having violated the government’s ban at the time on investing in dummy branch companies in China.

Investigations revealed that Hu was responsible for a series of transactions using forged documents and seals to transfer company funds to overseas destinations.

Investigators said that Sun and another former PEWC chairman, Tung Ching-yun (仝清筠), knew that fraudulent transactions were going on at the time, and that they acted as accomplices by hiding the theft of NT$20 billion from the company’s board.

Hu was PEWC’s chief financial officer from 1993 to 1998. During that period, he set up 146 subsidiaries and dummy companies in China, Hong Kong and the Virgin Islands. He used overseas dummy accounts to launder the money, which he and Sun had siphoned from PEWC.

Sun had inherited the company from his father, Sun Fa-min (孫法民), a businessman born in China’s Hebei Province who founded the Pacific Wire Manufacture Factory in 1948, which was changed to PEWC in 1958.

Leveraging PEWC’s financial clout, Jack Sun oversaw the company’s diversification into mobile phone services in the 1990s, leading to the establishment of Taiwan Mobile in 1997.

In 2003, Sun was forced to resign as chairman of Taiwan Mobile after the company invested in Taiwan Fixed Network and Taiwan High Speed Rail and incurred huge losses.

With the revelation of the PEWC embezzlement scandal, Sun reportedly had racked up debts totaling NT$22.5 billion, including bank loans and other debt obligations.

However, he ignored court orders to pay off the debts and continued to live an extravagant lifestyle, with media reports showing him shopping or dining at expensive places or being pictured with young models.

In 2010, the Taipei District Court sentenced Sun to four years in jail, while Hu received an 18-year term and a fine of NT$1 billion.

The pair filed an appeal, but the Taiwan High Court last year upheld the convictions, mainly for embezzlement and forgery, but reduced the prison terms to three years for Sun and 14 years and six months for Hu.

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