UMC head to step down -- guilty or not

United Microelectronics Corp (UMC, 聯電) chairman Robert Tsao (曹興誠) will relinquish his post immediately if he is found guilty of illegally investing in a Chinese semiconductor start-up, the company said yesterday.

In any event, Tsao plans to retire by June 2007, before the annual shareholder meeting, the world's second-largest contract chipmaker said in a statement published by a Chinese-language newspaper yesterday.

Tsao, 58, has already tapped chief executive Jackson Hu (胡國強) to take over his position, according to the statement.

"Having earned a good reputation from employees and customers, Hu will be able to bring constant growth for the company in the future," the Hsinchu-based chipmaker said.

Top UMC officials, including Tsao and vice chairman John Hsuan (宣明智), are under investigation over an alleged breach of trust after claims surfaced that they illegally invested in or transferred technologies to He Jian Technology (Suzhou) Co (和艦) in China.

The Suzhou-based chipmaker later proposed to offer a 15-percent stake in exchange for UMC's past administrative aid, which was endorsed by UMC's shareholders early this month.

The planned management shake-up garnered only a lukewarm reaction from investors yesterday.

Fund manager George Wu (吳裕良), who manages the equivalent of US$31 million on behalf of Invesco Taiwan Ltd (景順投信) in Taipei, said he was neutral about the planned personnel change.

"That will only bring investors' focus back to UMC's fundamentals, but will not exert any big influence on the company's operation," Wu said, adding that industrial cycles would continue to be the deciding factor in the chipmaker's profitability.

In the statement, UMC urged prosecutors to speed up the probe into Tsao's alleged breach of trust, in order to quell the upheaval caused by the case, which the company said is accruing political overtones.

The company said that Tsao has already turned down President Chen Shui-bian's (陳水扁) offer of another term as presidential policy adviser.

Presidential Office Spokesman Chen Wen-tsung (陳文宗) said that "the president will take that into account for reconsideration."

As the He Jian case is now in the hands of the judiciary, "everyone should respect the judicial investigation and no one should in any way attempt to intervene or disrupt the judicial operation," Chen Wen-tsung said.

Tsai Tien-yuan (蔡添源), spokesman of the Hsinchu Prosecutors' Office, which is in charge of the case, denied that any political influence was involved in the case and stressed that the investigation would carry on as scheduled.

"Prosecutors will act according to the evidence they collect, rather than the external forces," Tsai said.

The company also called on prosecutors to lift the four-month restriction preventing He Jian chief executive Shyu Jann-hwa (徐建華) from leaving the country.

Tsai said yesterday that, to facilitate the investigation, the travel ban would remain in place until the case is closed.

No timetable has been set for its conclusion, he added.

Additional reporting by Huang Tai-lin