Taiwan News, Staff Writer
2014-07-17 11:16 AM
Chen allegedly claimed that the huge stash of cash in the residence was the proceeds from land sales, although his wife claimed no knowledge of the matter. Both have denied that there was anything illicit about the cash. The pair has been charged with embezzling nearly NT$200 million in cash as well as violating the Securities and Exchange Act and the Money Laundering Control Act and have been transferred to the Taipei District Prosecutors Office for further investigation.
Officials at Nankang Tire became suspicious after an investigation by chairman Chiang Ching-hsing found that prices paid by Nankang for raw materials have been higher than those paid by rivals in the industry for many years. The price differential has sapped the company’s competitiveness and earnings per share have suffered, and Chiang initiated a financial audit in May to pin down the source of the problem.
Chiang is a former police officer who holds a doctorate earned in the UK and worked in the Criminal Investigation Bureau (CIB) for many years. He joined Nankang Tire in March this year after retiring and sought out his former colleagues in the CIB when he discovered discrepancies in the company’s accounting records.
Police investigators found one trader who has paid out kickbacks to Chen since 1997, with the margin rising from US$7 per ton for rubber to the current rate of US$40 per ton. In 17 years the one supplier has reportedly delivered more than NT$230 million in kickbacks.
Another 10 or so traders have doled out an extra USD30-40 per ton to Chen, some for as long as 11 years, with the total amount estimated at more than NT$1.5 billion.
Chen and his wife allegedly funneled some of the funds to establish offshore companies in Mauritius. They also availed themselves of Nankang’s US dollar accounts for money laundering and distributed funds among more than 60 domestic bank accounts.
Chen apparently had gotten wind that he was being investigated and began making frequent withdrawals numbering in the millions of NT dollars and seeking other ways to transfer funds overseas. Prosecutors and police finally took steps to freeze Chen’s accounts and ordered a search of the Chen residence in Hsinchu as well as Nankang company offices.
The haul reportedly included piles of NT$1000 and 2000 banknotes stuffed into brown paper bags as well as some 20 boxes and two suitcases stuffed with more bills. There were also papers indicating over US$700 million in overseas dollar deposits and more than 10 sheets listing time deposits with domestic banks
An initial inventory estimates the amount recovered from the residence at nearly NT$200 million. Prosecutors and police have not ruled the possibility of others implicated in the case and will expand their investigation as needed.