Koo, Jr. free on NT$100 mil. bail

One reason prompting his surrender is that three of his top aides at Chinatrust charged with insider trading were acquitted by the Taipei district court on October 7.

All three, however, were convicted of embezzlement and breach of trust.

Certain he would be absolved, Koo chose to testify as a witness in the Longtan scandal, in which the former first family allegedly took at least NT$420 million (US$12.17 million) as a bribe.

The money wound up in two Swiss banks, which suspected laundering. A report was made to Egmont, an worldwide anti-money laundering organization. A copy of the report was given the law-enforcement authorities in Taipei.

President Chen apologized on August 14 for what he “shouldn’t have done,” but blamed his wife for remitting part of the government subsidies for his election campaigns.

They did not admit the money was a bribe.

The surrender was made easy by Procurator-General Chen Tsung-ming, who ordered the Special Counsel to take over Koo’s insider trading case from the Taipei district court.

It was Koo’s Hong Kong subsidiary, Red Fire Development Ltd., that was put up as a front to buy into Mega Financial Holding. Koo had Chinatrust loan the necessary funds to Red Fire in the insider trading deal.

Koo is allegedly involved in the Longtan scandal by helping arrange the sale of 76 hectares of land to the government for NT$8.6 billion in 2004 by his uncle Leslie Koo, chairman of the Taiwan Cement Company.

The price was bloated. The land was worth a mere third of the price the government paid to found the science park.

Leslie Koo told Special Counsel prosecutors earlier this month his nephew introduced Tsai Ming-cheh, a special assistant to former first lady Wu Shu-chen.

Wu is standing on trial for corruption, charged with borrowing invoices from friends and relatives to claim a NT$14.8 million reimbursement from a “state affairs” fund under her husband’s control.

Her husband was not indicted together with her in November 2006, for he was immune to prosecution, but was regarded as an unindicted co-defendant who would be formally charged on leaving office. He stepped down last May 20.

After the sale was completed, Leslie Koo said, Tsai asked him to remit the “commission” to the foreign bank accounts. Prosecutors regarded the commission as the bribe.

Tsai, arrested on charges of influence peddling, was released on bail last week. He admitted to the brokering.

Lee Chieh-mu, former director of the Hsinchu science-based industrial park, is charged with taking a bribe of NT$30 million in facilitating the sale of land at Longtan. He was arrested for corruption in early October, but released on bail last week.

Prosecutors of the Special Counsel wanted to confirm Jeffrey Koo took NT$100 million out of the commission his uncle paid the former first family. The money, however, was later returned to the Taiwan Cement chief executive.

The younger Koo was released on bail after the long questioning session.

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