Far Eastern Group (遠東集團) chairman Douglas Hsu (徐旭東) yesterday said the company did not attempt to bribe members of ex-president Chen Shui-bian’s (陳水扁) family to gain full control of a Chinese subsidiary of Pacific Sogo Department Store (太平洋崇光百貨).
The retailer’s statements came after Next Magazine reported that prosecutors are probing Far Eastern after allegations it deposited US$11.5 million in an overseas account held by Chen’s family to help it win management control of Taipei-based Pacific Sogo after a deal closed six years ago.
Prosecutors said the investigation could be part of a broader probe into money laundering by Chen’s family, the report said.
“The report totally smears Far Eastern,” Hsu told a press briefing yesterday. “But I feel relaxed because I did not do anything wrong.”
The report said prosecutors found that Far Eastern had entrusted ABN AMRO Bank with the task of buying a 40-percent share of Sogo’s Chinese unit from Carlyle Group for US$68 million in 2006, but the group paid more, US$79 million, last year.
That could provide a clue linking an unusual transaction to an overseas account held by Chen’s family, the magazine said.
“The transaction with ABN AMRO is purely business and has nothing to do with bribery,” Hsu said. “The price decision was based on a third-party revaluation report by analysts and accountants.”
Far Eastern Group said it did not entrust ABN AMRO with the task of buying Sogo shares. It was Carlyle, who hastened to sell its share, that picked ABN AMRO to sell its holdings, it stressed.
Far Eastern spent US$79 million in acquiring a 40 percent share of Sogo’s Chinese operation from ABN AMRO, which bought the share from Carlyle in 2005 for US$63 million.
Carlyle and Sogo were the major shareholders of Sogo’s Chinese subsidiary. Sogo was restricted from investing more than 40 percent of its net value at the time.
Eyeing the robust Chinese retail market, Far Eastern was willing to pay a premium price for Sogo’s Chinese operation, Hsu said. The Chinese retailing unit had improved its gross margin to 23 percent from 17 percent after ABN AMRO took over, he said.
The transaction was completed in May this year rather than last year as indicated in the report, the group said.
Hsu urged the prosecutors and investigators to find the truth as soon as possible.
Shares of Far Eastern Group’s local subsidiaries including Far Eastern Textile (遠東紡織), Asia Cement (亞洲水泥) and U-Mine Marine (裕民航運) fell by 2.39 percent, 1.98 percent and 0.61 percent, under-performing the benchmark TAIEX index, which gained 1.67 percent yesterday.
Far Eastern Group yesterday filed a slander lawsuit against Next Magazine reporters responsible for the report and Chinese Nationalist Party (KMT) Legislator Chiu Yi (邱毅), New Party Secretary-General Lee Seng-fong (李勝峰), former Sogo chairman Chang Chi-min (章啟明) and others for allegedly spreading false information.
Chen’s office yesterday dismissed the allegation that he received kickbacks from Hsu, saying that he would not rule out taking legal action against his accusers.
The office also rejected previous allegations from KMT lawmaker Chiu Chang (邱彰) that the former president’s son, Chen Chih-chung (陳致中), had two bank accounts in the US and that he had four mansions worth tens of million of dollars registered under his name.
The office labelled the accusations as “ridiculous.”
In a related development, the Supreme Prosecutors’ Office’s Special Investigation Panel (SIP) yesterday summoned former Presidential Office treasurer Chen Cheng-hui (陳鎮慧), former deputy secretary-general Ma Yung-cheng (馬永成) and former presidential aide Kuo Wen-pin (郭文彬) as part of its continued investigation into the alleged money laundering case involving the former first family.
SIP Prosecutor Chu Chao-liang (朱朝亮) said the trio were questioned as witnesses.
ADDITIONAL REPORTING BY KO SHU-LING AND JIMMY CHUANG
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
RSS