Jeffrey Koo Jr (辜仲諒), former vice chairman of CTBC Financial Holding Co, has been indicted on charges of illegal profiteering and breach of trust related to business takeovers and purchases of real estate.
The Taipei District Prosecutors’ Office on Monday announced the indictments of Koo and four CTBC executives for contravening the Securities and Exchange Act (證券交易法) and on charges including breach of trust, financial statement fraud, misappropriation of assets and non-arm’s length transactions.
The executives are suspected of profiteering a total of about NT$773 million (US$24.6 million at the current exchange rate), prosecutors said.
They cited evidence of financial irregularities and nonperforming loans in the takeover of five businesses and one property in Kaohsiung since 2005, which they said were connected to Koo’s establishment of offshore shell company Red Fire Development (紅火公司) in 2004.
The executives are former CTBC chief financial officer Perry Chang (張明田), CTBC Securities Investment Service board director Lee Sheng-kai (李聲凱), former CTBC Bank vice general manager Lin Hsiang-hsi (林祥曦) and Koo’s brother-in-law, Steven Chen (陳俊哲).
The indictments came as Koo issued a statement thanking the judiciary for clearing his name after the Taipei District Court on Friday last week acquitted him of embezzling about US$300 million from CTBC Financial Holding, citing insufficient evidence.
The new case centers on alleged embezzlement and illegal asset transfers related to Red Fire Development, which was registered in Hong Kong by Koo and the other executives.
Investigators found financial irregularities in the purchase of Chengching Lake Tower (澄清湖大樓) in Kaohsiung and the takeover bids for five firms since 2005 by the executives.
The takeovers of Fongshan Credit Cooperative in Kaohsiung, Ban Yu Paper Mill in Yunlin County and Hua Wang Electric Co in then-Taipei County, as well as Yi Ming Investment Co and Yi Hsing Investment Co in Taipei, and subsequent financial transactions, including alleged irregularities in securing bank loans, are mainly related to the four other executives, prosecutors said.
Investigators found that Koo and the other executives made NT$100 million from the sale of Chengching Lake Tower, then valued at NT$850 million, to CTBC Bank for NT$950 million, prosecutors said.
The takeovers of the five companies netted them an estimated total of NT$673 million through irregular transactions, financial statement fraud and nonperforming bank loans, prosecutors said.
Koo — the scion of the Koo family, which controls the CTBC financial empire — is chairman of the CTBC Charity Foundation and owner of the Chinese Professional Baseball League’s Brothers Baseball Club.
He was elected president of the Chinese Taipei Baseball Association last year.
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