Asset managers detained in Taiwan labor fund bribery case

12/12/2020 03:11 PM
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Daniel Tarng (left) and Chiu Ming-chiang (right) / CNA file photo
Daniel Tarng (left) and Chiu Ming-chiang (right) / CNA file photo

Taipei, Dec. 12 (CNA) The CEO of PJ Asset Management Co. (PJAM) and three others were ordered detained and held incommunicado on Friday, as part of a growing investigation into the alleged bribery of a Ministry of Labor (MOL) funds manager in a scheme to manipulate stock prices.

The Taipei District Court approved the request by the Taipei District Prosecutors Office to detain PJAM CEO Daniel Tarng (唐楚烈) and executive Chiu Yu-yuan (邱裕元), as well as Fuh Hwa Securities Investment Trust Co. Chief Investment Officer Chiu Ming-chiang (邱明強) and asset manager Liu Chien-hsien (劉建賢) on suspicion of violating the Securities and Exchange Act.

Prosecutors allege that Tarng and Chiu purchased a large number of shares of Far Eastern Group in April 2019, which they planned to sell off between April and July of this year.

However, when the price of the stocks failed to rise as anticipated, the suspects allegedly contacted Yu Nai-wen (游迺文), head of the domestic investment division of the Bureau of Labor Funds (BLF) at the MOL, seeking his help in using the government fund to purchase the stocks so they can unload them.

In July, executives from PJAM and Fuh Hwa met Yu at a restaurant in Taipei, where the latter agreed to purchase the stocks at artificially high prices using money from the labor fund, according to the prosecutors'office.

Yu, who is alleged to have purchased more than 400,000 shares through the scheme in return for bribes, came under suspicion during a routine audit of the fund.

Prosecutors later found that between July 27 and Sept. 8, Yu made repeated deposits of sums of money, ranging from NT$30,000 to NT$100,000, into his bank account, the prosecutors'office said.

According to prosecutors, a wider probe of Yu's financial accounts between September 2012 and September 2020 revealed multiple irregularities, including credit card spending that vastly exceeded his monthly salary and a one-time deposit of over NT$9 million (US$319,294) from an unidentified source.

All of this led to the suspicion that he was taking bribes in exchange for manipulating the share prices of selected stocks on the local equity market.

Yu was removed from his post on Sept. 18 pending an investigation. He was ordered detained and held incommunicado on Nov. 27.

Prosecutors have since expanded the scope of the investigation, carrying out raids of Tarng and Chiu Ming-chiang's residences and summoning all four suspects for questioning on Thursday.

On Friday, the four were detained on suspicion of committing multiple crimes, including violating the Anti-Corruption Act by bribing a public official and violating the Securities and Exchange Act by conspiring to manipulate stock prices.

(By Lin Chang-shun, Frances Huang and Matthew Mazzetta)

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