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June 20, 2017

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Bank chief detained in illegal loans case

THE head of a major Taiwan bank has been detained on suspicion of granting illegal loans, just months after another banking scandal rocked the island’s financial sector.

SinoPac Holdings Chairman Ho Shou-chuan and two others are being investigated over an alleged NT$5 billion (US$165 million) of loans made to an “offshore company with no real operations.”

The case comes after the former chairman of Mega International Commercial Bank was indicted in December on charges including insider trading.

That followed a massive US$180 million fine slapped on Mega by American authorities after they said they found “suspicious transactions” between its New York and Panama branches.

On Sunday, Taipei District Court approved a request by prosecutors to take Ho and the other two suspects into custody, saying there was a risk of evidence tampering or collusion.

Local prosecutors investigating the case searched Ho’s residence and office last week.

Ho “and the others are suspected of jointly violating laws including the Securities and Exchange Act and breach of trust,” prosecutors said. No formal charges have yet been made.

The case revolves around alleged illegal lending to a company called J&R Trading Co by a SinoPac subsidiary since 2009.

Local media claimed the funds were routed to finance an investment in a commercial building in Shanghai.

According to the court statement, Ho said that, at most, he is accountable for “administrative negligence” and did not cause the company any damage.

The bank, which is operating as normal, said it will cooperate with the investigation.


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