Sat, Jul 02, 2005 - Page 10 News List

FSC task force to probe trading scandal

By Jackie Lin  /  STAFF REPORTER

Refusing to be passive in the snowballing insider-trading scandal in which one of its senior officials has become embroiled, the Financial Supervisory Commission yesterday announced that it will form a task force investigating illegal trading of Power Quotient International Co (勁永國際) shares.

"As rumors abound, we decided to take an initiative to probe the case and protect our reputation," commission chairman Kong Jaw-sheng (龔照勝) said at a press conference.

Power Quotient, which makes and markets computer-memory modules, flash-memory storage devices and peripherals, was found to have inflated revenue figures for last year. The Taipei Prosecutors' Office and the Black Gold Investigation Center suspect that somebody was making illegal profits by manipulating stocks.

In a bid to unravel this complex financial web of intrigue, the commission's task force will investigate employees of the Taiwan Stock Exchange Corp, the Securities and Futures Bureau, the Financial Examination Bureau, prosecutors and investigators, as well as their close relatives, to find out whether they were trading Power Quotient's shares after the government started probing the case last December, said Lu Daung-yen (呂東英), the commission's vice chairman.

Lu will serve as the convener of the task force.

"We'll examine whether any government officials are guilty of malpractice in this case," he said.

As Lee Chin-chen (李進誠), the director-general of the commission's Examination Bureau, was summoned by prosecutors for questioning on Monday, he will not participate in the task force, Lu said.

"Lee doesn't have to be temporarily suspended from his position, as prosecutors have required, unless he is indicted," Lu said.

He said that the commission is entitled to carry out quasi-judiciary investigations and can examine abnormal share transactions, capital flows and search for evidence of criminal activities.

"This will be a race between the commission and prosecutors to hunt down illegal investors," he said.

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