Hospital execs in alleged drug fraud out on bail

Three senior executives from a local health care company that runs seven hospitals in Taiwan were released on bail yesterday by the Changhua District Court.

They were questioned by prosecutors in connection with an alleged fraud in the purchase of medication.

The Changhua District Prosecutors Office (CDPO) on Thursday summoned Show Chwan Health Care System Chief Executive Officer Huang Ming-ho, his daughter Huang Yi-ting and the group's deputy financial chief Hu Yu-mei for questioning over allegations of fraud.

Huang is accused of setting up a pharmaceutical company under the name of his nephew to buy medicine in bulk at discounted prices.

The company then allegedly resold drugs to Show Chwan at the full price, prosecutors said, adding that the price difference then flowed into Huang's own pockets.

Huang is a former independent lawmaker and the driving force behind his Changhua-based hospital chain. According to reports, Huang allegedly used the money from the alleged fraud to buy an apartment in a well-known luxury project in Taichung.

Prosecutors on Thursday raided several locations and summoned 20 people, including Huang, to the prosecutors' office for questioning.

More than 70 investigators from various units in Changhua, Taichung and Taipei visited 13 locations, including hospitals in the Show Chwan chain, offices and residences of potential suspects, prosecutors said.

After questioning the aforementioned three senior executives throughout the night, prosecutors yesterday at 5 a.m. requested that the district court detain and hold them incommunicado to prevent them from colluding with one another.

The court held a session at 10 a.m. and made a decision in the afternoon, ruling the three to be released on bail. Huang, his daughter and Hu were released on bail of NT$13 million (S$545,990), NT$5 million and NT$1 million, respectively.

The CDPO said it will decide whether or not to file an appeal once it receives the official ruling.

Health Ministry to Expand Investigation across Taiwan

Commenting on the incident, Health Minister Chiu Wen-ta said his ministry will strengthen its investigation into the purchase of medication by hospitals around the country to check for possible irregularities.

Kuomintang (KMT) lawmaker Su Ching-chuan, who doubles as the president of the Taiwan Medical Association, was quoted by the United Evening News as saying that it is normal that the price differences for medications are part of a hospital's income.

Su said the price differences can be used to improve medical facilities or labour environments, stressing that the public should not see this as a negative incident.

The lawmaker said the controversy over the case is that the owner of the hospital chain established a pharmaceutical company and allegedly put the price differences of the medication into his own pocket instead of putting into the hospital's income accounts.