Prosecutors yesterday detained two people in connection with a financial scandal that has sent shockwaves through Taiwan's political system, and has even begun to affect cross-strait ties.
Chia Hsin Food and Synthetic Fiber Co (嘉新食品化纖) general manager Wang Lin-i (王令一) and Union Insurance Co (友聯產險) president Frank Wang (王事展) were held on suspicion of violating the Securities and Exchange Law (證券交易法).
The detentions came as authorities investigated the parent group of the companies, Rebar Asia Pacific Group. The Rebar Group's chairman, Wang You-theng (王又曾), fled to China on Dec. 30 with his wife, and is suspected of having embezzled millions of dollars from the group.
Lin-i is Wang You-theng's son, while Frank is his younger brother.
They were the first two people to be detained in the Rebar case.
"We found it necessary to detain the two defendants as they are suspected of having earned more than NT$100 million [US$3 million] from illegal transactions. They face more than seven years in prison." said Fred Lin (
Kuo Chi-ling (
Prosecutors are also probing whether operations in dozens of other units in the group run by family members involved irregularities such as insider trading, breach of trust and forgery.
Prosecutors have ordered about 40 members of the Wang family and the conglomerate's top executives to remain in the country pending investigation.
The scandal began to unfold after a bank run last Friday quickly turned into a wide-ranging criminal investigation into financial malfeasance.
The scandal has threatened thousands of jobs and has erased millions of dollars of wealth on the stock market.
The run on The Chinese Bank (中華銀行) began after China Rebar Co (中國力霸) and Chia Hsin Food and Synthetic Fiber, all under the parent Rebar Asia Pacific Group (力霸亞太企業集團), filed applications for insolvency protection on Dec. 29.
Wang You-theng fled to China the next day.
The firms failed to notify the Taiwan Stock Exchange Corp of their insolvency claims immediately -- as required under financial regulations -- postponing notification until last Thursday.
Approved
The companies' request to the Taipei District Court for insolvency protection was approved on the same day.
The Central Deposit Insurance Corp (
Chia Hsin Food and Synthetic Fiber is suffering from a NT$19.9 billion debt stemming from losses in its man-made fiber business.
China Rebar, an insurance, financing, broadband and TV shopping business which acts as a guarantor for Chia Hsin Food and Synthetic Fiber, has debts worth NT$20.7 billion.
The Taiwan Stock Exchange has also announced that 41 listed companies had suffered losses of NT$3.11 billion from investments in Rebar's Asia Pacific Broadband Telecom Co (
The Rebar Group employs more than 5,000 people, many of whom took to the streets to try to protect their jobs, saying that authorities' decision to freeze the assets of the two troubled firms will force employees out of work.
In related news, the Chinese Nationalist Party (KMT) yesterday announced that it would cancel Wang You-theng and his wife's party memberships. It also suspended Frank Wang's central standing committee membership.
The KMT decided that action should be taken immediately, as the scandal had damaged its reputation.
"As a responsible opposition party, the KMT made a quick and necessary decision in response to the scandal. We hope that the DPP will solve the incident and stop dragging the KMT into the Rebar scandal," KMT Spokesman Huang Yu-cheng (
Additional reporting by Mo Yan-chih
also see stories:
Premier calls on China to hand over Rebar fugitive
President asks Su Tseng-chang to conduct inquiry
Legislature likely to pass bill on debtor disclosure
Asia Pacific Telecom `on track'
CLA vows to protect Rebar employees
Banks refuse loan to Rebar-linked Eastern Multimedia
Union Insurance attempts to allay clients' concerns
SILICON VALLEY HUB: The office would showcase Taiwan’s strengths in semiconductors and artificial intelligence, and help Taiwanese start-ups connect with global opportunities Taiwan has established an office in Palo Alto, one of the principal cities of Silicon Valley in California, aimed at helping Taiwanese technology start-ups gain global visibility, the National Development Council said yesterday. The “Startup Island Taiwan Silicon Valley hub” at No. 299 California Avenue is focused on “supporting start-ups and innovators by providing professional consulting, co-working spaces, and community platforms,” the council said in a post on its Web site. The office is the second overseas start-up hub established by the council, after a similar site was set up in Tokyo in September last year. Representatives from Taiwanese start-ups, local businesses and
EXPRESSING GRATITUDE: Without its Taiwanese partners which are ‘working around the clock,’ Nvidia could not meet AI demand, CEO Jensen Huang said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and US-based artificial intelligence (AI) chip designer Nvidia Corp have partnered with each other on silicon photonics development, Nvidia founder and CEO Jensen Huang (黃仁勳) said. Speaking with reporters after he met with TSMC chairman C.C. Wei (魏哲家) in Taipei on Friday, Huang said his company was working with the world’s largest contract chipmaker on silicon photonics, but admitted it was unlikely for the cooperation to yield results any time soon, and both sides would need several years to achieve concrete outcomes. To have a stake in the silicon photonics supply chain, TSMC and
‘DETERRENT’: US national security adviser-designate Mike Waltz said that he wants to speed up deliveries of weapons purchased by Taiwan to deter threats from China US president-elect Donald Trump’s nominee for US secretary of defense, Pete Hegseth, affirmed his commitment to peace in the Taiwan Strait during his confirmation hearing in Washington on Tuesday. Hegseth called China “the most comprehensive and serious challenge to US national security” and said that he would aim to limit Beijing’s expansion in the Indo-Pacific region, Voice of America reported. He would also adhere to long-standing policies to prevent miscalculations, Hegseth added. The US Senate Armed Services Committee hearing was the first for a nominee of Trump’s incoming Cabinet, and questions mostly focused on whether he was fit for the
INDUSTRIAL CLUSTER: In Germany, the sector would be developed around Taiwan Semiconductor Manufacturing Co’s plant, and extend to Poland and the Czech Republic The Executive Yuan’s economic diplomacy task force has approved programs aimed at bolstering the nation’s chip diplomacy with Japan and European nations. The task force in its first meeting had its operational mechanism and organizational structure confirmed, with Premier Cho Jung-tai (卓榮泰) the convener, and Vice Premier Cheng Li-chiun (鄭麗君) and Minister Without Portfolio Ma Yung-cheng (馬永成) the deputy conveners. Minister of Foreign Affairs Lin Chia-lung (林佳龍) would be the convener of the task force’s strategy group in charge of policy planning for economic diplomacy. The meeting was attended by the heads of the National Development Council, the Ministry of Economic Affairs, the
RSS