Prosecutors question owner of Prince Motors

Hsu Sheng-fa, center,  is subpoenaed by the prosecutor for questioning in Taipei yesterday.

Hsu Sheng-fa, center, is subpoenaed by the prosecutor for questioning in Taipei yesterday.

Taipei Prosecutors Office yesterday instructed Investigation Bureau officials to interrogate the family members of Hsu Sheng-fa (許勝發) - the owner of local car-making company Prince Motors and Cosmos Bank - and other suspects for allegedly emptying bank assets.
Under investigation and questioning by the officials were Hsu Sheng-fa, son Hsu Hsiao-jung, daughter Hsu Chuan-chuan, Cosmos Bank's auditing department director Shen Ming-lu, and shipping company Wan Hai Lines' board member Chen Chih-yuan (陳致遠).
On January 25, prosecutors raided offices and residences of the Hsu family because of their alleged involvement in granting illegal loans and hollowing out company assets.
The possible wrongdoings which prosecutors are investigating include fabricating business transactions, illegal loans and selling non-performing loans at reduced prices to the original debtor. These wrongdoings were estimated to total several billions in New Taiwan dollars.
The prosecutors suspected that the Hsu family members abused their power as board chairman and vice chairman of Cosmos Bank from 2001 to 2006, granting loans to Prince Motors and overestimating Prince Motors' collateral.
According to prosecution, the Hsus got Prince Motors and its sister companies to commit fake business transactions and then used these falsified records to apply for loans from Cosmos Bank.
The fake transactions amounted from NT$700 million to NT$800 million, and the companies carrying out the fake transactions included dozens of Prince Motors' sister companies.
The prosecutors also found that the Hsus had sold the non-performing loans to the loan's debtor at reduced prices, which is a violation of the Bank Law and the Securities and Exchange Law.