Two executives from a Hong Kong company believed to have conspired with Chinese intelligence agents will not be charged with breaching the National Security Act (國家安全法) due to a lack of evidence, the Taipei District Prosecutors’ Office said yesterday.
However, China Innovation Investment chief executive Xiang Xin (向心) and his wife, alternate board member Kung Ching (龔青), are still barred from leaving Taiwan, pending an ongoing trial concerning alleged money laundering, the office said.
Two other people who have been investigated for their ties to Xiang and Kung will also not be charged with breaching the National Security Act due to a lack of evidence, prosecutors said.
The couple was arrested by Investigation Bureau agents at Taiwan Taoyuan International Airport on Nov. 24, 2019, as they were returning to Hong Kong, shortly before Taiwan’s presidential election in January last year.
Their arrests came after William Wang Liqiang (王立強), a self-proclaimed Chinese spy seeking asylum in Australia, said the company, where he was formerly employed, was a front for efforts by Chinese intelligence personnel to target the democracy movement in Hong Kong and elections in Taiwan.
Although Xiang and Kung were released days after their arrest, they have since been barred from leaving Taiwan pending further investigation into the allegations.
On April 8, the couple was indicted on charges of money laundering. Prosecutors added that they were also under investigation for alleged breaches of the National Security Act.
Xiang previously held positions at several Chinese state entities, including the Commission for Science, Technology and Industry for National Defense, and served as the chief executive officer of China Innovation Investment, and another company, China Trends Holdings, after obtaining a Hong Kong passport in 1993, the indictment read.
Kung formerly worked as an art editor at a military affairs magazine under the commission, it said.
In 2016, a Shanghai-based wealth management firm, Guotai Investment Holding (Group) Co, paid Xiang HK$60 million (US$7.7 million) to support its purchase of ownership stakes in the two Hong Kong-listed companies he headed, as part of an attempted reverse merger.
Guotai ultimately purchased HK$203 million of shares in the two companies, which it planned to turn into subsidiaries and use to launder funds from a massive investment fraud it had carried out in China.
However, Guotai was later that year placed under investigation by Chinese authorities and in 2018 its founder was sentenced to life in prison.
In the course of the investigation into Guotai, the indictment said, Chinese police interviewed Xiang in Hong Kong on Aug. 9, 2016. Ten days later, Xiang and Kung traveled to Taiwan, where they each opened personal bank accounts.
After returning to Hong Kong, Xiang and Kung transferred HK$203 million from company accounts into their joint accounts at two Hong Kong banks, prosecutors said.
Late in 2016, they began making frequent trips to Taiwan, where they purchased a luxury apartment for NT$90 million (US$3.23 million) in Taipei’s Xinyi District (信義) in December and two adjoining properties in the same building for NT$200 million in February 2017, the indictment said.
The couple also transferred about NT$300 million in funds from Hong Kong to Taiwan to cover the cost of their real-estate acquisitions, tax payments and home decoration expenses, prosecutors said.
Prosecutors indicted Xiang and Kung under the Money Laundering Control Act (洗錢防制法), alleging that their money transfers and real-estate purchases in Taiwan were an attempt to conceal funds that they knew Guotai had illegally obtained through fraud.
Prosecutors seized the couple’s real-estate properties and asked the Taipei District Court to declare them legally confiscated.
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