Thu, Feb 01, 2018 - Page 4 News List

High Court drops NT$690 million fine against PEWC’s former boss Jack Sun

By Jason Pan  /  Staff reporter

The Taiwan High Court on Tuesday reached a verdict in a case over an embezzlement scandal at Pacific Electric and Wire Cable (PEWC), saying that former chairman Jack Sun (孫道存) does not need to pay NT$690 million (US$23.67 million) in compensation imposed in an earlier ruling and reducing a fine imposed on former PEWC chief financial officer Hu Hung-chiu (胡洪九).

The decision concerned a Taipei District Court ruling in 2012, when Sun was ordered to pay the company NT$690 million and Hu was ordered to pay US$327 million.

The district court also calculated accrued interest over seven years and imposed a total fine of NT$14 billion on the two men, which at the time was the highest court-ordered compensation for embezzlement and illegal transfer of assets.

Hu’s lawyers appealed the ruling.

The High Court on Tuesday reduced Hu’s fine by US$55,000.

It also said that the company had failed to pay an adjudication fee, which meant that the civil litigation had violated the law, and dismissed the 2012 ruling, relieving Su from paying the NT$690 million compensation.

Tuesday’s ruling can be appealed.

The case dragged on through the courts for more than two decades as Sun’s and Hu’s defense teams repeatedly appealed the rulings.

In a separate litigation, the Supreme Court in August last year upheld a guilty verdict against Sun and Hu.

Sun was sentenced to three years in prison, and Hu was sentenced to 14 years and six months for embezzlement and illegal transfer of about NT$20 billion of company funds to shell companies abroad starting in 1994.

In September last year Sun, 68, and Hu, 77, headed to prison to serve their sentences after exhausting the appeals process.

Some people were outraged at Tuesday’s ruling, saying that the court showed leniency to two convicted swindlers who made billions of New Taiwan dollars at the expense of individual investors.

“Taiwan’s justice system has one law for the rich and another for the poor,” a netizen wrote.

An investigation had revealed that Sun and another former PEWC chairman, Tung Ching-yun (仝清筠), knew that fraudulent transactions were taking place and that they acted as accomplices by hiding the theft from the company’s board.

Hu was PEWC 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), who founded the Pacific Wire Manufacture Factory in 1948. The company’s name 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 firm invested in Taiwan Fixed Network and Taiwan High Speed Rail and incurred huge losses.

By the time the PEWC embezzlement scandal came to light, Sun had reportedly had racked up debts totaling NT$22.5 billion, including bank loans.

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