Gobo Group president put under market manipulation investigation
By Ted Chen, The China Post
August 21, 2014, 12:04 am TWN
TAIPEI, Taiwan -- Gobo Group (國寶集團) President Chu Guo-rong (朱國榮) was called in for investigation yesterday by the Investigation Bureau, Ministry of Justice on suspicion of participating in market manipulation and defrauding the investing public.
Chu was called in along with about 10 other suspects by the bureau yesterday, and was transferred to the Taipei District Prosecutors Office for further questioning. Chu is facing charges of violating the Securities and Exchange Act (證交法).
Most notably, Chu is known to be one of the largest shareholders of Global Life Insurance Co. (國寶人壽), which was ordered by the Financial Supervisory Commission to be placed under government receivership following nine years of ailing performance, with the company's net worth plummeting to NT$25.2 billion in the red as of June this year.
Investigation Bureau officials stated that Chu is accused to misappropriating company capital with the aim of yielding personal gains through manipulating the price of Long Bon International Co. (龍邦), a Taichung-based hotel service provider.
Investigators stated that Chu and a number of associates had opened more than 30 dummy brokerage accounts between December 2011 and February of 2012 under the names of 13 family members and colleagues. During the period the market manipulation ring headed by Chu had managed to prop up Long Bon shares from NT$10 to NT$14, and had quickly liquidated their holdings to reap immense profits exceeding NT$10 million while leaving the unsuspecting investing public with severe losses.
Investigators added that from November 2012 to February 2013, Chu's market manipulation ring again employed 17 dummy brokerage accounts owned by his close relations, confidants and financial backers to hype up the share price of Gobo Group, claiming that he needed to stave off a boardroom coup within the company. As a result Gobo Group shares during the period surged from NT$19 to NT$34, reaping the company, Chu and his associates in the scheme considerable profits. Chu also reaped an additional NT$50 million in illegal gains by investing heavily in bullish stock warrants on Gobo Group shares.
Former Global Life Chairman Appeals against Government Takeover
Meanwhile, former Global Life Chairman Yeh Jia-ying (葉佳瑛) on Tuesday filed an appeal to halt the government takeover of the ailing insurance carrier. Sources close to Yeh stated that he wishes to oversee the acquisition of Global Life by a more capable carrier personally, and that the former chairman has a short list of ideal candidates.
The FSC responded that it stands by its decision to impose a government takeover, and that the company had ample time to address its ailing condition.