The Taipei District Court on Friday ordered that PJ Asset Management CEO Daniel Tarng (唐楚烈) and three others be detained with restricted communication as part of a growing investigation into the alleged bribery of a Ministry of Labor funds manager in a stock manipulation scheme.
The court approved a request by the Taipei District Prosecutors’ Office to detain Tarng and PJ Asset Management executive Chiu Yu-yuan (邱裕元), as well as Fuh Hwa Securities Investment Trust Co chief investment officer John Chiu (邱明強) and Fuh Hwa asset manager Marco Liu (劉建賢), for suspected breaches of the Securities and Exchange Act (證券交易法).
In April last year, Tarng and Chiu purchased a large number of shares in Far Eastern Group, which they planned to sell off between April and July, prosecutors said.
Photo: Tu Chien-jung, Taipei Times
When the stock price failed to rise as anticipated, the suspects allegedly asked Yu Nai-wen (游迺文), head of the Domestic Investment Division of the ministry’s Bureau of Labor Funds, to use the government fund to help them unload their stocks.
In a July meeting with PJ Asset Management and Fuh Hwa executives at a restaurant in Taipei, Yu agreed to purchase the stocks at artificially high prices using money from the labor fund, the prosecutors said.
Yu, who was allegedly paid bribes to purchase more than 400,000 shares through the scheme, came under suspicion during a routine audit of the fund, they said.
Prosecutors later found that between July 27 and Sept. 8, Yu deposited sums ranging from NT$30,000 to NT$100,000 (US$1,055 to US$3,516 at the current exchange rate) in his bank account, the prosecutors added.
A probe of Yu’s financial accounts from September 2012 to September this year showed multiple irregularities, including credit card spending that vastly exceeded his monthly salary and a one-time deposit of more than NT$9 million from an unidentified source, they said.
All of this led to the suspicion that he was taking bribes in exchange for manipulating the prices of selected stocks on the local bourse.
Yu was on Sept. 18 removed from his post, pending an investigation. On Nov. 27, he was detained and held with restricted communication.
Prosecutors have expanded the scope of the investigation, raiding the residences of Tarng and John Chiu, and summoning all four suspects for questioning on Thursday.
On Friday, the four were detained for suspected breaches of the Anti-Corruption Act (貪污治罪條例) by bribing a public official, and breaches of the Securities and Exchange Act by conspiring to manipulate stock prices.
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