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June 27, 2017

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CIB finds NT$230 mil. during corporate raid

TAIPEI, Taiwan -- The Criminal Investigation Bureau (CIB) yesterday discovered NT$230 million in cash at the office and residence of a Nankang Rubber Tire Corp. (南港輪胎公司) purchasing agent surnamed Chen, later arresting him and taking him to the Taipei District Prosecutors' Office (TDPO) over allegations of receiving kickbacks from more than 10 suppliers.

The CIB said Nankang Rubber Tire Chairman Chiang Ching-hsing (江慶興) in May reported Chen to the bureau, accusing him of demanding kickbacks from upstream suppliers. The company said Chen's alleged actions caused an increase to the firm's purchasing costs and affected its competitiveness.

Chen's main duty at the company is to purchase natural rubber, the CIB said, adding that he allegedly asked the natural rubber suppliers to give him kickbacks since 1997.

The CIB further said that it discovered that Chen allegedly set up an offshore company to launder the money, noting that Chen allegedly made the request for kickbacks and his wife assisted him with laundering the money.

Noting that Chen allegedly only received kickbacks in U.S. dollars, the CIB said Chen allegedly demanded the natural rubber suppliers to give him between US$7 and US$40 for every ton of natural rubber. In return, Chen allegedly would offer purchase orders for the natural rubber suppliers.

The CIB and Taipei Police Department Nankang Precinct yesterday morning jointly raided Chen's office and residence in Hsinchu City and discovered cash, Chen's remittance slips and documents of his offshore company, noting that the NT$230 million in cash was found in four cartons and two large suitcases.

The CIB questioned Chen and later transferred him to the TDPO on charges of violating the Securities and Exchange Act, the Money Laundering Control Act and breach of trust.

A source in the TDPO said the prosecutors suspect that Chen may have another accomplice, surnamed Chang, adding that Chang was also summoned to the prosecutors' office for questioning.

The source said in order to keep the investigation from affecting the stock market, the investigators chose not to reveal the incident to local media outlets before noon yesterday. The TDPO responded as saying that it cannot comment on an ongoing investigation.

The TDPO urged those upstream natural rubber suppliers who have been giving kickbacks to Chen to come to the prosecutors' office and identify the suspect.

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