Two executives from the Wang clan that controls Taiwan’s troubled Rebar conglomerate were detained on Thursday on charges of embezzling more than T$20bn (US$610m) of company funds.
The latest developments come as tensions grow over the Taiwanese conglomerate’s breakdown.
A large number of state-owned banks and other listed companies have already said they will have to book losses from non-performing loans to Rebar companies or from Rebar corporate bonds they hold.
China Rebar and Chia Hsin Food, the group’s two flagships, filed for insolvency in December but failed to disclose this to shareholders until a week later. Before the announcement, group founder Wang You-theng and his wife, Wang Chin Shih-ying, who heads several Rebar firms, left for China.
The Chinese Bank, a small lender owned by the Rebar group, was later declared insolvent and taken over by the government after customers rushed to withdraw funds.
Fred Lin, chief prosecutor at the Taipei District Court Prosecutors Office, said that Chia Hsin head Wang Ling-yi, a son of group founder Wang You-theng, and Frank Wang, the founder’s younger brother, were arrested because investigators believe they embezzled more than T$20bn of company money.
Mr Lin said that Wang You-theng and several other members of the Wang clan are suspects for violations of banking and securities laws.
Wang Ling-tai, head of the Asia-Pacific Telecom Group, another family enterprise, rejected allegations on Thursday that his company was also on the verge of bankruptcy.