Koo Jr pays NT$1bn, allowed to visit US

FOREIGN TRIPS::Having fled to Japan in 2006 when being probed over accusations of illegal share trading, Jeffrey Koo Jr needed to pay a hefty guarantee before visiting the US

By Rich Chang  /  Staff reporter

Sat, Dec 01, 2012 - Page 4

Former vice chairman of Chinatrust Financial Holding Co Jeffrey Koo Jr (辜仲諒) yesterday had his attorneys pay a guarantee fund of NT$1 billion (US$34.3 million) after the Taiwan High Court on Thursday evening granted his application to leave the country temporarily to visit his sick father, Jeffrey Koo Sr (辜濂松), in the US.

Koo Jr, who was sentenced to nine years in jail by the Taipei District Court for his company’s illegal purchase of a stake in Mega Financial Holding Co, has been banned from leaving the country since December 2008

The case is pending in the Taiwan High Court.

The High Court on Thursday evening ruled that it would allow Koo Jr to leave the country from yesterday until Dec. 21, providing the NT$1 billion guarantee was paid.

Koo Jr fled the country in November 2006 during prosecutors’ investigation, staying in Japan, among other places.

He returned to Taiwan in December 2008 to stand trial.

The Taipei District Court ruled that he had violated the Securities Exchange Act (證券交易法) and the Banking Act (銀行法).

The district court said Koo Jr and several company executives used NT$27.5 billion to buy a 9.9 percent stake in Mega Financial through a Hong Kong branch of Chinatrust in 2004, without the approval of the Chinatrust board.

That included the illegal purchase of US$390 million in loan notes, convertible into Mega Financial shares, using money earmarked for deposits and then locking in profits from the transaction through insider trading, it said.

The deals, known locally as the Red Fire Case after the name of the offshore company used to conduct the transactions, surfaced following prosecutors’ investigations into a bid by Chinatrust Financial to take over Mega Financial.

Red Fire Developments, capitalized at US$1, was set up in Hong Kong under the instructions of Koo Jr the ruling said.

He made US$30.47 million in profit from illegal trading and did not return the money to his company, harming the company’s interests, it said.

The court said that in 2006, Koo Jr. returned US$20.9 million to a Chinatrust branch overseas after the Financial Supervisory Commission discovered the irregularity, but he still kept US$9.57 million in a Hong Kong-based front company controlled by the Koo family.