Fund managers running fraud scheme: legislator
The China Post news staff Saturday, November 3, 2012, 12:03 am TWN
The China Post news staff--A legislator yesterday alleged that Taiwan's fund managers may have colluded in a massive plot to steal from the national coffers, as prosecutors opened a probe into alleged irregularities that have inflicted huge losses on government investments.
Legislator Lo Shu-lei of the ruling Kuomintang said she has received several complaints from Taiwan's investment trust firms, and has already started collecting evidence for some of the cases.
She said her findings may uncover a larger scandal.
Lo said she has reasons to believe that Taiwan's investment trusts have been engaged in a collective scam defrauding the government.
The lawmaker suggested that Cabinet form a task force consisting of accountants and lawyers to conduct a thorough check of the government's investments in the securities markets.
Her allegations come in the wake of revelations that the Labor Pension Fund and the Labor Insurance Fund lost more than NT$100 million in 2010 after a manager at ING Securities Investment and Trust Co. allegedly cheated them while handling their investments in a listed company, Ablerex Electronics.
The Taipei District Prosecutors Office said it has formed a task force to investigate the Ablerex investments, and will put the Bureau of Investigation's field office in Taipei in charge of probe.
The prosecutors said it will also ask the Financial Supervisory Commission (FSC) and ING for documents related to the investments.
The United Evening News cited the prosecutors as saying that they will bring in the fund manager, surnamed Hsieh, for questioning over breach of trust charges next week.
Legislator Lee Ying-yuan of the main opposition Democratic Progressive Party said the FSC already detected irregularities with some investment trust firms' operations in March 2011, and has so far punished 13 of them.
The financial authorities have also warned the Bureau of Labor Insurance against possible risks in having such firms handle its investments, Lee said.
But as of June this year, the bureau still had ING handle its investments, Lee said. He questioned whether the bureau is still a client of ING.
Legislator Lo, an accountant by trade, said the Ablerex scandal is a typical case of share prices being boosted by purchases through dummy accounts and then being resold to labor funds.
She said it is an apparent failure of the system, and it is a common trick of investment trust firms.
The United Evening News alleged that it has been common for fund mangers to collectively manipulate stock prices.
MOST POPULAR OF THIS SECTION