Taoyuan prosecutors raided BenQ Corp (
"Prosecutors raided BenQ's headquarters in Neihu (內湖), Taipei, as well as its factory in Taoyuan," Taoyuan District Prosecutors' Office spokesman John Chang (張進豐) told the Taipei Times yesterday.
Five prosecutors and dozens of agents from the Ministry of Justice's Investigation Bureau were involved in the search, he said.
Chang said several accounting and financial employees were interviewed by investigators during the raid.
Chang said that prosecutors received documents from the Financial Supervisory Commission in December last year alleging that the company was involved in insider trading.
Chang said the company was suspected of trading between 6 million and 7 million BenQ shares just before it released its fourth-quarter earnings report for 2005 last March, which made public some negative information about the company.
BenQ posted NT$19.72 billion in losses, or NT$7.7 a share, for the first three quarters of last year, pulled down by the non-profitable European handset unit it acquired from Siemens AG a year ago.
To stem losses, BenQ decided to stop funding the European handset unit last September and filed for insolvency.
BenQ also planned to raise NT$10 billion to pay back debts by the end of the third quarter, which totaled NT$4 billion of the first half of last year, by selling its long-term investments and fixed assets.
Chang said yesterday that since the release of the report, BenQ shares fell from NT$35 to NT$14 per share yesterday. He said prosecutors might summon high-level BenQ officials if they discovered they were involved in the scandal.
BenQ yesterday admitted that investigators had raided its headquarters in Taipei and its office in Taoyuan but said documents were about its bonus practices for overseas employees.
"We have provided relevant documents to the investigative authorities and we will fully cooperate with any investigation," spokesman Eric Yu (游克用) said in a statement released after the raid.
BenQ has 20,000 employees worldwide, its Web site says.
"The investigation may add some additional downward pressure to the shares on top of existing concerns over their profitability," said Tony Tseng (曾省吾), who rates the stock "neutral" at Merrill Lynch & Co in Taipei. "It's hard to see if it will have any fundamental impact on the company."
Additional reporting by Bloomberg
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