Thu, Mar 20, 2008 page4

• DPP officials deny bank allegations

  LOAN The Taiwan Post Co deposited money in Sunny Bank in a bid to maintain overall financial order, the postal agency's president, Wu Min-yu, said

  • By Shih Hsiu-chuan and Flora Wang / STAFF REPORTERS
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  Government officials yesterday clarified accounts following a media report that said the state-owned Taiwan Post Co was asked by the government to deposit NT$10 billion (US$324 million) in a bank affiliated with a Democratic Progressive Party (DPP) lawmaker.

  The latest issue of Next magazine published yesterday reported that Vice Premier Chiou I-jen (邱義仁) demanded Taiwan Post deposit NT$10 billion in Sunny Bank (陽信銀行), one day after DPP Legislator Hsueh Ling (薛凌) and her husband Chen Shen-hung (陳勝宏) were charged with involvement in a loan scandal at the bank last year.

  Chen, a former DPP lawmaker, is chairman of the bank.

  

  Democratic Progressive Party Legislator Hsueh Ling rebuts allegations made in Next Magazine, foreground, that Taiwan Post Co deposited NT$10 billion into the Sunny Bank, with which she is affiliated, in Taipei yesterday.

  PHOTO: CNA

  The report said Taiwan Post deposited NT$37 billion in some questionable banks, NT$10 billion of which was deposited in Sunny Bank. The bank has only returned NT$6.5 billion after Chiou had Taiwan Post defer payment four times.

  clarification

  Executive Yuan spokesman Shieh Jhy-wey (謝志偉) talked about the report on behalf of Chiou at a press conference yesterday, saying that Taiwan Post offered a loan to prevent a run on Sunny Bank and the lending was not a non-returnable deposit.

  "It's wrong to accuse the government of aiding Sunny Bank. The government will work out a plan for Sunny Bank to repay the loan interest and principal with the bank. The allegation of the report was unfair to the bank and to the government," Shieh said.

  "When a bank is having a financial crisis, the government has the obligation to step in to keep depositors of the banks from suffering losses," he said.

  When approached by reporters outside the Executive Yuan, Chiou also dismissed the allegation made by the report that he embezzled the Taiwan Post fund to aid Hsueh.

  Earlier yesterday at a press conference, Chinese Nationalist Party (KMT) caucus whip Lin Yi-shih (林益世) called the postal company's decision into question, saying that Sunny Bank's credibility had been sabotaged after suffering from an alleged embezzlement scandal last year, in which Hsueh and Chen were charged with seeking illegal loans with fake documents from the Sunny Bank.

  Lin questioned postal company president Wu Min-yu (吳民佑), who attended the conference, over whether DPP presidential candidate Frank Hsieh (謝長廷) had received the money as a campaign contribution.

  In response, Wu confirmed the magazine's report, but denied that Chiou was responsible for the company making the deposit.

  He said the postal company did not take the initiative to put the money in Sunny Bank until officials from the company participated in a meeting presided over by the Banking Bureau, under the Financial Supervisory Commission, and the Central Deposit Insurance Co.

  tight-lipped

  Meeting participants prompted the decision to have the Taiwan Post Co store the money in Sunny Bank in a bid to "maintain overall financial order," Wu said. He remained tight-lipped, however, when asked by KMT legislators regarding details of the meeting.

  At a separate setting yesterday, Ministry of Transportation and Communications Vice Minister Ho Nuan-hsuen (何煖軒) cited regulations indicating that the postal fund could be saved in the Central Bank as well as financial institutions with credit ratings approved by the Ministry of Finance.

  Taiwan Post currently keeps part of the postal fund at 34 state-run and private banks. The postal fund has topped NT$4 trillion, but only NT$722.5 billion are saved in these banks, he said.

  Ho said that the Sunny Bank has a rating of AAA- and is rated B by the post office itself. The amount saved in Sunny Bank is approximately NT$9.5 billion.

  In addition to Sunny, Ho said that the Taiwan Post also has savings in the Chinese Bank (中華商業銀行), Bowa Bank (寶華銀行), Asia Trust (亞洲信託) and other banks.

  Additional reporting by Shelley Shan
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