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.
GOOD DIPLOMACY: The KMT has maintained close contact with representative offices in Taiwan and had extended an invitation to Russia as well, the KMT said The Chinese Nationalist Party (KMT) would “appropriately handle” the fallout from an invitation it had extended to Russia’s representative to Taipei to attend its international banquet last month, KMT Chairman Eric Chu (朱立倫) said yesterday. US and EU representatives in Taiwan boycotted the event, and only later agreed to attend after the KMT rescinded its invitation to the Russian representative. The KMT has maintained long-term close contact with all representative offices and embassies in Taiwan, and had extended the invitation as a practice of good diplomacy, Chu said. “Some EU countries have expressed their opinions of Russia, and the KMT respects that,” he
An increase in Taiwanese boats using China-made automatic identification systems (AIS) could confuse coast guards patrolling waters off Taiwan’s southwest coast and become a loophole in the national security system, sources familiar with the matter said yesterday. Taiwan ADIZ, a Facebook page created by enthusiasts who monitor Chinese military activities in airspace and waters off Taiwan’s southwest coast, on Saturday identified what seemed to be a Chinese cargo container ship near Penghu County. The Coast Guard Administration went to the location after receiving the tip and found that it was a Taiwanese yacht, which had a Chinese AIS installed. Similar instances had also
CHANGES: After-school tutoring periods, extracurricular activities during vacations or after-school study periods must not be used to teach new material, the ministry said The Ministry of Education yesterday announced new rules that would ban giving tests to most elementary and junior-high school students during morning study and afternoon rest periods. The amendments to regulations governing public education at elementary schools and junior high schools are to be implemented on Aug. 1. The revised rules stipulate that schools are forbidden to use after-school tutoring periods, extracurricular activities during summer or winter vacation or after-school study periods to teach new course material. In addition, schools would be prohibited from giving tests or exams to students in grades one to eight during morning study and afternoon break periods, the
AMENDMENT: Contact with certain individuals in China, Hong Kong and Macau must be reported, and failure to comply could result in a prison sentence, the proposal stated The Chinese Nationalist Party (KMT) and the Taiwan People’s Party (TPP) yesterday voted against a proposed bill by Democratic Progressive Party (DPP) lawmakers that would require elected officials to seek approval before visiting China. DPP Legislator Puma Shen’s (沈伯洋) proposed amendments to the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (臺灣地區與大陸地區人民關係條例), stipulate that contact with certain individuals in China, Hong Kong and Macau should be reported, while failure to comply would be punishable by prison sentences of up to three years, alongside a fine of NT$10 million (US$309,041). Fifty-six voted with the TPP in opposition