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Investors furious after Yeh retakes post

Scandal-plagued Sophie Yeh (葉素菲), who was released on bail from a district court in May, is back in the spotlight after reassuming the helm of Procomp Informatics Co (博達科技), ETToday reported yesterday on its Web site, citing company officials.

The report left investors outraged, prompting government officials to search for possible ways to prevent her from retaking the chairwomanship.

Investors' claims for compensation from the delisted firm are close to NT$6 billion (US$194 million), with 9,300 shareholders' claims in total, according to the Securities and Futures Investors' Protection Center (投資人保護中心).

But for investors, the government's answer was disappointing.

"We are helpless about what has happened," Financial Supervisory Commission spokesman Lin Chung-cheng (林忠正) said in a phone interview.

"The commission now cannot do anything about it, Procomp is no longer subject to the Securities and Exchange Law (證券交易法) or regulated by the commission, as the company lost its publicly traded status in March," Lin said.

The company is now subject to the regulations of the Corporate Law (公司法) and is therefore under the Ministry of Economic Affairs' jurisdiction, he added.

The Shihlin District Court in May released Yeh on NT$80 million bail, after almost 10 months in jail. Yeh was indicted for embezzling over NT$7 billion (US$225.8 million) from Procomp, which makes chips for use in communications and networking equipment.

Last October, prosecutors recommended a sentence of 20 years imprisonment and a NT$500 million fine -- NT$6.5 billion less than the amount she was accused of stealing.

The company said Yeh's return to the post last month was to "help solve some problems the company has" with debt creditors and some Japanese clients, the ETToday reported.

The scandal was uncovered after the chipmaker filed a restructuring plan last summer amid financial difficulties. Since then, the investor's protection center has been helping victims seek damages.

Chan Tsai-hung (詹彩虹), president of the investor's protection center, yesterday expressed concern over Yeh's resumption of her chairmanship at the company, saying it is considering revising related laws to prohibit the same thing from happening again.

"Yeh's taking back her chairmanship may allow her to manipulate the company's capital ... the center will pay close attention to this development," Chan was quoted by ETToday as saying.

Chan's concern was echoed by the FSC's Lin, who said that in order to further protect investors, the commission, together with the economic affairs ministry, will study legal amendments to close regulation loopholes, the official said.

Lin, however, did not elaborate on the outline of possible amendments.

In response, Duh Tyzz-jian (杜紫軍), the head of the ministry's Department of Commerce, said Yeh's chairmanship appears to be lawful, since Yeh has yet to be convicted of the embezzlement charges in court.

According to Article 30 of the Corporate Law, people who are sentenced to more than one-year imprisonment for crimes such as fraud are barred from taking posts in the management of registered companies.

Nevertheless, since the Procomp case involves breaches of the law, the department will list the company as the key object of financial inspections for the year and will carry out the process later this month, Duh said.

The official suggested amending the Securities and Exchange Law to prevent companies from losing their listed status after committing severe economic crimes, in an effort to keep them from getting away from stricter regulations and supervision, he said.

Apart from legal amendments, the most effective balm for affected investors would be for the court to expedite its hearing process and put people responsible for wrongdoing in jail, said Charles Yeh (葉銀華), a professor at the Graduate Institute of Finance at Fu Jen Catholic University.

Charles Yeh meanwhile urged the authorities to track down and recover as much of the company's missing capital as possible, to compensate for investors' losses, Yeh said.
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