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Taiwan's finance chief questioned in expanding stock scandal
2006-05-29 03:26:59 THE ASSOCIATED PRESS

TAIPEI, May 29 (AP) -- Prosecutors on Monday summoned Taiwan's finance minister for questioning in an expanding insider trading scandal that also involves President Chen Shui-bian's son-in-law.

Joseph Lyu became the latest member of Chen's inner circle to be touched by the scandal, which involves allegations that Chen son-in-law Chao Chien-min used insider information to reap substantial profits on purchases of shares in partly state-owned property company Taiwan Development Corp.

Prosecutors say Lyu will be questioned on his role in approving a 16.5 billion New Taiwan dollar (US$515 million) loan arranged by the Bank of Taiwan to Taiwan Development.

Lyu asserted his innocence as he entered the Taipei Prosecutors Office.

"My integrity is absolutely clean," he said. "Everything I did is an open book."

Chao, who is now in police custody, stands accused of using dummy accounts to purchase shares from Taiwan Development last July shortly before the ailing property firm was granted a loan from 29 banks, prompting its value to skyrocket.

The Bank of Taiwan, the lead bank, was then headed by Lyu.

Taiwan Development's chairman, Su Te-chien, allegedly passed information about the loan to Chao. Prosecutors suspect that Chao then used his own stock in the company to help Su fight off a rebellion by dissident shareholders.

Lyu originally appointed Su to his post at Taiwan Development.

Both Chao and Su were detained last week pending further investigation by prosecutors and police.

Since the scandal broke, Chen's approval rating has dipped to about 20 percent, the lowest level of his six-year presidency.

Lawmakers of the opposition Nationalist Party have called on him to resign, but party Chairman Ma Ying-jeou has appealed for calm, and poured cold water on their proposal to press for Chen's impeachment in the Legislature.

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