The China Post staff
The latest count by investigators put the debts incurred by Well Phone Securities Co. at NT$7.35 billion while the Securities and Futures Commission (SFC) has stepped up monitoring of financial situations at all securities brokerage houses in Taiwan. Law enforcement agents said they are still expanding the probe in order to determine the exact total figure Well Phone owes to banks and other creditors. Investigators said Well Phone chairman Chen Chien-chi has allegedly embezzled NT$70 million from corporate funds before escaping to mainland China via Hong Kong. However they believe that the amount of money wired abroad by Chen could be much higher since Chen had doctored the accounting books to uphold the company’s public image. On the surface, Well Phone has only a NT$545 million debt as shown in its official financial statement. But since Chen had formerly served as president of Well Phone, he managed to keep a separate set of accounting books. Initial investigation shows that Well Phone’s other debt might stand at NT$6.85 billion, including over NT$1.8 billion owed to banks, another NT$1 billion owed to underground money houses that charge exorbitant interest rates.
There are also over 20 government employees and people in the judicial community involved in money dealings with Chen. Taipei district prosecutor Lo Jung-chien said a special investigation team is planning to take further actions, including a search for the “in-house accounting books” to find the accurate figures and who are the other people involved in the scam. Chen, who is currently hiding in mainland China, had reportedly spent the whole night on June 30 in the office to rearrange the accounting figures and the list of people with financial dealings with the company. He then left for the mainland in a rush on July 1. Sources said Chen had called a few close friends in Taipei Tuesday night for help. But one of the persons reached by Chen said he could not help to solve the staggering debts, especially the money owed to underground money lenders. Officials of the SFC and the Taiwan Stock Exchange where shocked by the scandal at Well Phone since it was long regarded as a model securities companies. The Taipei branch of the accounting firm Deloitte & Touche has been endorsing Well Phone’s financial statements. Phone. A senior accountant said the accounting firm checked the securities house’s accounting records through standard procedures. The firm was obviously deceived by the forged chops presented by Chen. Decreasing stock prices and bearish trading activities are increasing the financial pressure on more securities firms.