Former Singfor Life chairmen indicted for hallowing out over US$400 million in company assets by using company assets as collateral to take out loans for personal gain

http://www.chinapost.com.tw/print/442025.htm

Former Singfor Life chairmen indicted
Friday, July 31, 2015
By John Liu, The China Post

The Special Investigation Division (SID, 特偵組) yesterday concluded its investigation of Singfor Life Insurance Co. (幸福人壽) and indicted the company’s former chairmen Eric Teng (鄧文聰) and Huang Cheng-i (黃正一) for hallowing out over US$400 million in company assets. The SID said that while managing Singfor Life’s overseas assets, Teng had sacrificed the company’s interest for his own benefits. By using company assets as collateral for personal gain, Teng violated sound insurance business practices. He is now in custody under the Taipei District Court. According to the SID, by putting down Singfor Life’s assets as collateral, Teng took out loans and remitted them to his own overseas account. Teng also gave US$11 million to his accomplice Huang, the SID said.Under the guise of improving the company’s overseas investment returns, Teng wired US$156 million to set up a fund at EFG Bank in Hong Kong, but the fund was later placed as collateral.

The incident was revealed last August, only after the Financial Supervisory Commission (金管會) took over Singfor Life as the company’s financial state deteriorated. The collateralized loan totaled US$225.75 million.

The SID said Teng had obtained an illegal gain of NT$12.7 billion (or US$402.86 million), and has charged Teng and Huang for breaching the Insurance Act, the Securities Act, the Exchange Act and the Money Laundering Control Act.

Suspects Denied Wrongdoing

Both Teng and Huang denied wrongdoing. Teng argued that he had listened to professional managers’ advice, and only rubber-stamped documents as part of company procedures.

Huang was startled by the accusation, claiming that he had delegated investment affairs to Teng since taking the chairman’s position in 2006, and that he was deceived by Teng in the incident.

Huang was also accused of taking out a US$22 million loan, which he then shared with others. In his defense, Huang said he had gained nothing from the transaction.

Huang said he sold all his Singfor Life shares to Teng during his one-year tenure at the company and that he had also paid off his US$300 million collateralized loan.

Teng also enlisted help from three staff members of Standard Chartered, where he opened his account to remit illegal gains, the SID claims. One of the Standard Chartered employees is Taiwanese, and the SID has issued an arrest warrant for that staff member.

In the aftermath of the scandal, EFG Bank returned US$60 million to Singfor Life, and froze US$190 million worth of assets. Standard Chartered has also wired US$170 million to the company.

 

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