Taipei: Jeffrey Koo Jr., former vice chairman of CTBC Financial Holdings Co., has been sentenced to a jail term of seven years and eight months for his role in a building purchase scandal, the Taipei District Court announced Tuesday. Prosecutors revealed that Koo and his colleagues inflated the purchasing price to acquire a building for NT$950 million (US$31.15 million), which was above the fair market price of NT$850 million, resulting in a NT$100 million loss for CTBC Financial.
According to Focus Taiwan, Koo and three of his colleagues denied any wrongdoing. However, the court stated that the transaction, orchestrated by the four plaintiffs, disrupted order in the financial market. The court’s statement cited the Securities and Exchange Act, noting that Koo and his colleagues violated transaction rules with related parties and breached trust in the 2005 deal to buy the building at an inflated price when he served as vice chairman.
In 2019, prosecutors indicted Koo and his colleagues, including former CTBC Financial chief financial officer Perry Chang, former CTBC Bank chief financial manager Lin Hsiang-hsi, and former CTBC Investment Service board member Lee Sheng-kai, for their alleged involvement in the deal. The court criticized the four plaintiffs for displaying a poor attitude after committing the crime.
Chang, Lin, and Lee received sentences of eight years, nine years and six months, and nine years and four months, respectively, based on the court ruling. While the ruling is subject to appeal, Koo has been prohibited from leaving the country.
Prosecutors further accused the four of breach of trust, fabricating financial results, and engaging in transaction irregularities in another deal where CTBC Bank, the flagship unit of CTBC Financial, acquired bad loans from several companies. Koo’s former brother-in-law, Chen Chun-che, was also implicated in the building transaction and bad loan case but has fled overseas and is now on a fugitive list, prosecutors stated.
In a separate statement, CTBC Financial argued that the court misunderstood these transactions and maintained that the deals were favorable for the company. CTBC Financial expressed support for Koo and his colleagues in seeking legal redress to clear their names.
Prosecutors initiated an investigation into the building and bad loan transactions after discovering irregularities during a probe into another financial scandal involving an offshore “paper company,” Red Fire Development, dating back to 2004. In 2024, the Supreme Court ordered a retrial, citing inadequate reasoning in a high court decision, which had previously cleared Koo of allegations in the “Red Fire” case under the Banking Act and the Criminal Code for causing significant financial losses to CTBC Bank.
Koo resigned as vice chairman of CTBC Financial after his indictment in the “Red Fire” scandal in 2006. He currently chairs the CTBC Charity Foundation.