The latest kingpin to fall was former Kuomintang Kaohsiung City mayor and former Chung Hsing Commercial Bank chairman Wang Yu-yun. He was handed a sentence of seven years and four months on January 20 for breach of trust in connection with the scandal over T$15bn ($446m) in loans to the troubled Taiwan Pineapple Group by his bank in early 1999. Five other executives, three from Chung Hsing and two from the Taiwan Pineapple Group received lesser sentences ranging from three years and six months to seven years.
Since the DPP came to power, prosecutors have delivered indictments against a considerable number of once powerful figures who are implicated in financial scandals.
Besides Mr Wang, among those either already convicted or facing charges are:
- former China Development Bank chairman Liu Tai-ying, who was indicted for breach of trust in the Zanadu Development scandal;
- former Tuntex Group chairman Cheng You-hao, who was indicted for breach of trust and is now hiding abroad;
- former pro-KMT lawmaker Lo Fu-chu;
- Republic of China General Chamber of Commerce chairman Gary Wang, who was sentenced to four years for Taichung Medium Business Bank (TMBB);
- Kuang San Enterprise Group chairman Tseng Cheng-jen (sentenced to 28 years for embezzlement and illegal lending);
- and former KMT Legislative Yuan speaker and current People First Party (PFP) legislator Liu Sung-pan, who is also a former TMBB chairman and was sentenced in May to five years for providing proxies for Mr Tseng.
“These are all cases that the government prior to the transfer of power never dared to touch,” says Cabinet spokesman Lin Chia-lung.
Stiffer punishments
On January 13, the Legislative Yuan passed the DPP Cabinet’s package of revisions to seven major financial laws that will stiffen prison sentences and fines for a wide range of financial crimes. The revisions affect the Banking Law, the Financial Holding Company Law, the Law on the Regulation of Bill Finance Companies, the Trust Law, the Credit Co-operation Law, the Insurance Law and the Securities Exchange and Transaction Law.
Huang Tien-mu at the Bureau of Monetary Affairs says that the heavier penalties, as well as clauses for lighter punishment or immunity for suspects who turn informer or turn themselves in, will have “considerable effect” on deterring future financial crimes.
The revised rules impose harsher punishments for offences including abuse of powers by a responsible executive, director or employee in a financial institution to illicitly benefit others, embezzlement or breach of trust, attracting deposits without a banking licence, issuing fake financial or credit cards, or hacking into financial institutions’ computer systems.
The increased penalties will depend in part on the amount of money involved in the particular crime. People who profit by at least T$100m from a financial crime now face a minimum of seven years imprisonment and fines of between T$25m and T$500m. Previously such crimes could be punished with prison terms of three to 10 years and maximum fines of T$100m.
Anyone who calculates that raking off millions is worth the price of a short jail sentence will be stymied by the requirement that convicted offenders must repay the full amount of their illicit gains or face confiscation of other assets.
