Jeffrey Koo Jr., former vice chairman of Chinatrust Financial Holding Co., will appeal a ruling issued by the Taipei District Court to put him behind bars for his role in a financial scandal, his lawyer said Monday. Koo was sentenced to nine years in jail by the court earlier Monday as the court found him guilty of violating the Securities and Exchange Act and the Banking Law in relation to transactions of structured notes linked to Mega Financial Holding Co. The ruling found that Koo and other executives of Chinatrust Financial masterminded the illegal transactions which allowed offshore paper company Red Fire Developments to pocket US$30.47 million and caused losses for Chinaturst Financial. The scam, known locally as the Red Fire Case, surfaced following prosecutors' intensive investigations into a bid by Chinatrust Financial to take over Mega Financial. Red Fire Developments, capitalized at US$1, was set up in Hong Kong under Koo's instruction, the ruling said. Yeh Chien-ting, a member of Koo's legal team, expressed regret over the ruling and said Koo would definitely appeal the case. Chinatrust Financial said that, as Koo now held no post at the company, the litigation was his personal affair, and the ruling would have no impact on the company's operations. According to the ruling, Koo, without approval from the board of directors, bought the structured notes linked to Mega Financial from issuer Barclays Bank PLC and then sold the securities in a non-arm's length transaction to Red Fire Developments, which garnered the windfall from the deal. The ruling said that Koo embezzled US$9.57 million out of Red Developments' windfall to cover his donations to former President Chen Shui-bian in the period 2002-2005, but which he could not report to his company as having spent. He is said to have then remitted the remaining US$20.90 million to overseas units of Chinatrust Financial. The court also ruled that Koo manipulated Mega Financial's share price before official approval of China Trust Financial's request to take over Mega Financial had been made public. Yeh claimed the US$9.57 million had been largely appropriated by Steven Cheng, another former executive of China Trust Financial who is also Koo's brother-in- law, and that Koo had no knowledge of the use of the fund. Cheng is on Taiwan's wanted list as he has fled the island to avoid trial. Yeh added that Mega Financial's share price was based on market mechanisms, and Koo lacked the power to directly or indirectly influence the price. During the trial, which started in February, Koo repeatedly denied the allegations and insisted on his innocence. 