TAIPEI - A FUGITIVE banker returned to Taiwan on Monday and immediately faced questioning over a money laundering probe that has seen former president Chen Shui-bian locked up, a television report said.

Jeffrey Koo Jr, former vice chairman of Chinatrust Financial Holding, had been hiding in Japan since evading an arrest warrant in 2006.

The TVBS cable news network said Koo was led away in handcuffs upon his arrival at the airport. He was immediately brought to the prosecutor office for questioning over Chinatrust's bid for a rival company, which prompted the arrest warrant two years ago.

However, he is also being questioned over the allegations levelled at Chen, who has been in jail since last week over the corruption probe.

Chen, his wife, son, daughter-in-law, and brother-in-law have all been named as defendants in the money laundering case.

Koo's father, Mr Jeffrey Koo, chairman of Chinatrust Financial Holding, was summoned in late October as a witness over the firm's suspected role in the case against Chen.

Koo's return was reportedly initiated by prosecutors in exchange for judicial leniency, but no prosecutors were immediately available for comment.

Prosecutors had raided three companies, including Chinatrust, over their suspected roles in transactions to the Chen family's overseas accounts.

The Koo family allegedly paid Chen hundreds of millions of Taiwan dollars in kickbacks, in exchange for the government's purchase of land at a price that was above market value.

Taiwanese prosecutors say US$21 million (S$32 million)was sent to Swiss bank accounts belonging to Chen's daughter-in-law in 2007. The funds have since been frozen.

Chen has admitted his wife wired 20 million US dollars abroad from his past campaign funds but said she did so without his knowledge. He denies laundering money. -- AFP

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