Ex-Taipei city councilor starts 6-year jail term for stock manipulation

Taipei, Aug. 6 (CNA) Former Taipei City Councilor Chen Cheng-chung (陳政忠) reported to prison on Tuesday to start a six-year sentence for stock manipulation and misrepresentation in a company prospectus.

Chen, 69, who served as a city councilor for nearly 40 years until he was forced to give up his post in July, arrived at the Taiwan Taipei District Prosecutors Office at around noon, 90 minutes later than the scheduled time of 10:30 a.m.

Wearing a white cap, white polo shirt and face mask, he did not make any public comments before hugging family members who accompanied him and turning himself over to prosecutors to be jailed, according to local media.

Chen's fate was sealed last month when the Supreme Court rejected his appeal of a combined six-year prison sentence issued by the High Court for violations of the Securities and Exchange Act.

The High Court had sentenced Chen to four years in prison for manipulating the stock of Hongfu Construction, a property development company he founded and in which he was a key shareholder.

The court also sentenced Chen to an additional two years in jail for providing false or misleading information in a company prospectus that formed part of its application for a public offering.

According to a statement from the Supreme Court announcing its verdict on Chen's appeal, it said the ruling was final and that prosecutors should take measures to prevent Chen's escape.

The case dates back to 2001, when the Taipei District Prosecutors Office indicted Chen for breach of trust, fraud, business misappropriation, and violations of the Securities and Exchange Act.

Chen, who had served 10 terms as a Taipei City councilor since 1985, was accused of hollowing out the property development company's assets and stealing up to NT$6 billion (US$183.41 million) from the business since 1993.

In the first trial against Chen in 2006, the Taipei District Court handed down a 20-year sentence for stock manipulation, breach of trust and misrepresentation in a company prospectus, but the High Court later reduced the sentence to nine years.

Since then, Chen has appealed his case multiple times, both winning and losing various retrials.

The Supreme Court's judgement on July 17, upholding the High Court's combined six-year prison sentence, represented the culmination of a legal battle lasting more than two decades between prosecutors and the long-time city councilor.

The Taipei City Council said at that time that because the Supreme Court's ruling was final, Chen had to give up his post as a city councilor in accordance with provisions of the Local Government Act and the Public officials Election And Recall Act.