The High Court yesterday upheld a conviction of former Hualien County commissioner Fu Kun-chi, finding him guilty of insider trading and speculative stock trading, for which he was given a two-year, 10-month sentence.
It was the third ruling in the high-profile case, which began in 1997 and involved several other prominent figures.
However, while the guilty verdict was upheld, some viewed Fu’s relatively short sentence as lenient, as he and coconspirators illegally profited hundreds of millions of New Taiwan dollars by defrauding investors, which eroded public confidence in the nation’s stock market.
Photo: Hsiao Fang-chi, Taipei Times
The 56-year-old was originally associated with the Chinese Nationalist Party (KMT), but later joined the pan-blue People First Party and was elected to the Legislative Yuan representing Hualien in 2001, 2004 and 2008.
He then became an independent to run for Hualien County commissioner, winning in 2009 and 2014, although he remained mainly associated with the two pan-blue parties.
Critics said yesterday’s ruling was too lenient and too late, as the case — among several involving financial irregularities by Fu — dragged on for more than 21 years through appeals and retrials, as well as maneuvers by his legal team to evade prosecution.
Meanwhile, Fu continued to enjoy the privileges and benefits of being a legislator and nearly two full terms as commissioner.
The court said in a statement that Fu was found guilty of insider trading, stock price manipulation and other related charges, as well as contravening the Securities and Exchange Act (證券交易法).
However, the ruling can still be appealed, it added.
The case began in 1997, when Fu and then-Taiwan Pineapple Corp chairman Huang Tsung-hung (黃宗宏), socialite Huang Jen-chung (黃任中), Huang Lung Investment Co general manager Ma Chung-fang (馬忠芳) and others pooled about NT$1.2 billion (US$38.93 million at the current exchange rate), which they used to manipulate stock prices and illegally promote certain shares.
The statement said that the group mainly focused on five listed companies: Taiwan Pineapple, Yu Cheng Construction, Ever Fortune Industrial Co, Hualon Corp and Kai Chu Ceramics, which has since been taken over by KPT Industries.
An investigation revealed that their first project was Taiwan Pineapple, in which they bought a large stake, then made bogus transactions through shell companies and released promotional news to hike the share price from NT$70 to NT$250 in a short time.
After they sold for a massive profit, the shares plummeted, resulting in significant losses by individual investors.
Investigators found that Fu was not involved in the Taiwan Pineapple speculation, but that he entered the picture afterward to help manipulate the price of shares of Yu Cheng Construction, Ever Fortune Industrial, Hualon and Kai Chu Ceramic and engage in insider trading, illegally profiting hundreds of millions of NT dollars.
The investigation found that Fu, Huang Tsung-hung and Ma borrowed NT$4 billion from Huang Jen-chung to manipulate the stock prices of the four firms and generate bogus transactions.
In earlier trials, Fu and Huang Tsung-hung were found guilty and sentenced, but they repeatedly appealed and filed for retrials, while Huang Jen-chung died in 2004 due to complications from diabetes while owning NT$4.95 billion in unpaid taxes.
In the second retrial in 2013, when the case had already dragged on for 13 years, the High Court cited provisions of the Criminal Speedy Trial Act (刑事妥速審判法) in handing down a three-year term to Fu and a four-year term to Huang Tsung-hung.
Fu was in September last year imprisoned for eight months on a conviction in a separate stock manipulation case involving Hold-Key Electric Wire & Cable Co Ltd.
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