Taipei prosecutors yesterday searched offices in Taipei 101 and Hung Kuo Real Estate Development Corp as part of a fraud investigation involving former Taipei 101 chairman Lin Hong-ming (林鴻明).
After Lin was taken into custody on fraud charges by the Taipei District Court on Sept. 27, Taipei 101 management immediately announced Lin’s position as chairman had been terminated. Lin remains vice chairman of Hung Kuo.
Prosecutors said they suspected the vice general manager of Hung Kuo, Lin Nan-tsung (林南聰), was involved in the alleged fraud. As one of Lin Hong-ming’s closest aides, Lin Nan-tsung may have helped his boss use fraudulent practices to transfer funds and hollow out company assets, prosecutors said.
They raided Lin Nan-tsung’s residence and his office at Hung Kuo and summoned him for questioning.
Lin Hong-ming’s office in Taipei 101 was also searched, prosecutors said.
Lin Hong-ming is the owner of Jin Shang Chang Development Co, which took out corporate loans of NT$1.8 billion (US$60 million) from China United Trust and Investment Corp in 1999 for property development dealings, prosecutors said.
At the time, Lin Hong-ming put up several tracts of land in Tamsui (淡水), in what is now part of New Taipei City (新北市), as collateral for the loans, but the loans were not paid back.
To offload the bad debt, China United Trust and Investment sold the debt to several land development and construction firms.
However, Jin Shang Chang did not report the bad debt on its financial statements and Lin Hong-ming is suspected of hollowing out the assets of his company and violating the Securities and Exchange Act (證券交易法).
Jin Shang Chang’s General manager Chen Chi-tsang (陳祈蒼) and chief financial officer Tung Tsui-hua (董翠華) have also detained by judges in the case.