2 former Taiwan Styrene chairs investigated for possible scams
The China Post news staffTAIPEI, Taiwan -- Two former chairmen of the publicly traded Taiwan Styrene Monomer Corp. (台苯). and around 40 others were questioned by investigators yesterday in a probe into possible scams that siphoned corporate capital.
January 12, 2013, 12:00 am TWN
Led by 57 prosecutors and their assistants, more than 100 police officers and agents of the Ministry of Justice's Investigation Bureau (MJIB) raided the offices and residences of suspects in Taiwan.
They summoned 41 people for questioning and confiscated unspecified documents and transaction records after a one-year investigation.
Former Chairman Chang Chung-chien (張鍾潛) and his successor Liu Cheng-yuan (劉正元) were among the suspects questioned for alleged irregular financial dealings that harmed the financial health of the company and the interests of shareholders and investors. The company is listed on the Taiwan Stock Exchange.
While conducting an audit in 2011, officials at the Taiwan Stock Exchange detected suspicious dealings, including false transactions that were intended to pad up the company's revenues and earnings.
They forwarded the case to the Financial Supervisory Commission and then to the MJIB and Taipei Prosecutors Office for an expanded probe.
Prosecutors said the investigation has focused on alleged violations of securities transaction regulations.
Sources revealed that Taiwan Styrene may have suffered financial losses of around NT$500 million from the company's questionable financial transactions.
The management allegedly diverted corporate funds via investments in two subsidiaries and paid an unusually high purchasing price to acquire Yangmingshan Tienlai spa hotel. The management later allegedly sold the hotel to a family by the name of Chiu at a much lower price, causing huge corporate loss, said the sources.
Former Chairman Chang, who earned a Ph.D. degree in management from a Colorado university, once held a senior position at the Ministry of Economic Affairs, supervising the operations of state-owned enterprises and serving as vice economics minister.
He also served as chairman of the government-run Taiwan Aluminum Co. and Taiwan Power Co.
Liu, who succeeded Chang for the chairmanship, has been the chairman of a construction company that belongs to an investment group headed by Sun Tieh-han (孫鐵漢).
Sun himself and two members of the Chiu family were also among those summoned by prosecutors for questioning yesterday.
Taiwan Styrene Monomer was founded in 1979 and its main chemical products include styrene monomer, para-diethyl benzene, toluene and ethyl benzene.