Jeffrey Koo Jr (辜仲諒), former vice chairman of CTBC Financial Holding Co and chairman of Chinese Taipei Baseball Association, has been sentenced to seven years and eight months in jail for his role in a property scandal, the Taipei District Court said on Tuesday.
Citing the Securities and Exchange Act (證券交易法), the court said in a statement that Koo and three of his colleagues contravened rules governing transactions with related parties and breach of trust in a 2005 deal in which CTBC Financial bought a building at an inflated price of NT$950 million (US$31.37 million at the current exchange rate) — higher than the fair market price of NT$850 million — causing a loss of NT$100 million for CTBC Financial.
Koo was the vice chairman of the financial firm at the time.
Photo : Wang Ting-chuan, Taipei Times
In 2019, prosecutors indicted Koo and his colleagues — former CTBC Financial chief financial officer Perry Chang (張明田), former CTBC Bank chief financial manager Lin Hsiang-hsi (林祥曦), and former CTBC Investment Service board member Lee Sheng-kai (李聲凱) — for their role in the deal.
Koo and three of his colleagues denied any wrongdoing.
The court said that the transaction, masterminded by the four defendants, had disrupted order in the financial market, and that the four showed a bad attitude after committing the crime.
Chang, Lin and Lee were sentenced to eight years, nine years and six months, and nine years and four months respectively.
While the ruling is subject to an appeal, Koo has been banned from leaving the country, the court said.
The four were also accused of breach of trust, fabricating financial results, and transaction irregularities in another deal in which CTBC Bank, the flagship company of CTBC Financial, bought bad loans from several other companies, prosecutors said.
Koo’s former brother-in-law, Chen Chun-che (陳俊哲), also played a critical role in the building transaction and bad loan case, but as he has fled overseas, he has been placed on a fugitive list, prosecutors said.
CTBC Financial issued a statement saying the court had misunderstood these transactions and insisted the deals were favorable to the company.
CTBC Financial said it supported Koo and his colleagues in seeking legal redress to clear their names.
Prosecutors launched an investigation into the building and bad loan transactions after they found irregularities as they were probing another financial scandal involving an offshore “paper company,” Red Fire Development, in 2004.
Last year, the Supreme Court ordered a retrial, citing inadequate reasoning in a High Court decision, which had cleared Koo of allegations in the so-called “Red Fire” case under the Banking Act (銀行法) and the Criminal Code for causing significant financial losses to CTBC Bank.
Koo stepped down as vice chairman of CTBC Financial after he was indicted in the “Red Fire” scandal in 2006.
He now chairs the CTBC Charity Foundation.
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