Wu denies using inside information

Taiwan Stock Exchange Corp Chairman Wu Nai-jen (吳乃仁) yesterday denied allegations of insider trading, and said he plans to sue a reporter from a Chinese-language newspaper for reports that indicate he is connected to the short-selling of shares of Abit Computer Corp (陞技電腦).

"I have nothing to do with the illegal trading," Wu told a press conference yesterday. "I hope prosecutors and investigators keep the investigation private and let the evidence do the talking."

In short-selling an investor bets that a particular stock will fall in value and profits by buying it back later at a lower price.

According to the newspaper report, after allegedly becoming involved in insider trading related to Power Quotient International Co (勁永國際), Wu also participated in short-selling of shares of Abit Computer, a computer motherboard maker, in December.

Wu has been listed as a defendant for the Abit case by the Taipei District Prosecutors' Office.

The newspaper said that the Taiwan High Court Prosecutors' Office received a report saying Wu colluded with stock brokers to reap profits by short-selling shares of Abit Computer before the TSE unveiled the company's questionable accounts at a press conference on Dec. 14 last year.

The report said that according to transaction records inspected by prosecutors, before Dec. 7, only around 1 million shares of Abit Computer were short-sold, but the number surged after that date, rising to as high as 7 million shares on the eve of the TSE's press conference.

Wu said that except for the part about the report received by the prosecutors' office, the accusations in the news report were untrue, and he would sue the reporter for fabricating information and damaging his reputation.

The figures included in the report were incorrect, Wu said. From late October, about 60 million shares of Abit Computer were short-sold, with the number gradually declining to 30 million, Wu said. After the stock exchange warned investors to be cautious regarding the firm's shares, the number of shares to be short-sold started to rise and reached 42 million on Dec. 14, he said.

Besides Wu, former TSE president Fortune Ju (朱富春) and Chou Hsing-hua (周星華), a stock trader at Yuanta Core Pacific Securities Co (元大京華證券), are also listed as defendants in the case.

So far, prosecutors have found no evidence to connect Wu, or any TSE official, to the case, Hsueh Wei-ping (薛維平), acting spokesman of the Taipei District Prosecutors' Office, said yesterday.