Prosecutors are reportedly investigating Chinese Nationalist Party (KMT) Legislator William Tseng (曾銘宗) and former KMT legislator Lo Shu-lei (羅淑蕾) over suspected involvement in alleged financial fraud at New Site Industries (NSI).
The Chinese-language Mirror Media weekly yesterday reported that Tseng, at a meeting in his office on April 11 last year, pressured the representatives of three state-owned banks to extend the loan payment terms of NSI’s owners Yang Wen-hu (楊文虎) and his wife, Wang Ying-chih (王音之).
Tseng, a former head of the Financial Supervisory Commission (FSC) and a former general manager of Taiwan Cooperative Bank who was KMT secretary-general at the time, persuaded the banks to extend the payment terms for three months, which caused a delay in the investigation into the alleged fraud and allowed NSI’s owners to flee the country in June, the report said.
The meeting was reportedly attended by Wang, along with the general managers of Taiwan Business Bank, First Commercial Bank and Hua Nan Bank.
An indictment issued on Jan. 9 showed that the three banks provided a total of NT$13.6 billion (US$453.243 million at the current exchange rate), or 36.9 percent of the NT$38.6 billion in loans on which the company defaulted.
Tseng denied Mirror Media’s allegations, after saying in a statement on Tuesday that he was doing his job as a legislator to help the public in financial matters involving banks and small and medium-sized enterprises.
Tseng also denied that he knew Yang and Wang.
The FSC issued a statement saying that its officials had not been invited to the meeting and were not in attendance, adding: “We respect the financial institution’s right to an independent decisionmaking with regard to providing loans and credits.”
The Chinese-language Apple Daily reported that Lo had lent NT$40 million to the couple to bolster the company’s finances.
The investigation has found that the couple’s daughter, Yang Yu-cheng (楊宇晨), had transferred the deed for a luxury mansion in Nantou County, believed to be worth NT$50 million, to Lo’s adopted son.
Lo was friends with Wang and when the company started facing financial difficulties Wang borrowed money from Lo to pay the bank loans, the Apple Daily reported.
Prosecutors have subpoenaed Lo to question him in connection with the case.
The property transaction allegedly contravened the Money Laundering Control Act (洗錢防制法), prosecutors said.
Prosecutors are also investigating real-estate purchases in Taiwan and abroad by the couple and daughter, and NSI executives.
The couple are also suspected of wiring money to foreign accounts to launder the NT$38.6 billion.
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