Three executives of Inventec Appliances Corp (英華達), a local handset maker known for its OKWAP brand, were detained yesterday after being questioned by prosecutors on suspicion of insider trading. The company's share prices plunged in response to the news.
Prosecutors on Thursday questioned 17 people, including Inventec Appliance officials and their relatives. The three executives detained by prosecutors were company spokesman Michael Chen (陳烈宏), deputy general manager Chuang Chin-tai (莊今台) and chief financial officer Ivan Tseng (曾慶安).
Two relatives of company executives -- Chang Se-wei (張思微), the wife of company president Daniel Lee (李家恩), and Lee's younger brother Lee Chia-chung (李家忠) -- were also detained yesterday, the Banciao District Prosecutors' Office in Taipei County said.
Another six were released on bail ranging from NT$100,000 (US$3,030) to NT$5 million, the prosecutors' office said.
Shares of Inventec Appliances and parent company Inventec Corp (
Inventec Appliances, which also produces iPod music players for Apple Inc, closed at NT$74.4 on the Taiwan Stock Exchange, while Inventec Corp dropped to NT$24.4.
"We respect the investigation and will fully cooperate with the authorities," Inventec Appliances said in a statement to the Taiwan Stock Exchange yesterday.
The company said that its chairman, Chang Ching-sung (
More than 200 prosecutors and investigators raided Inventec Appliances on Thursday afternoon to search for evidence to support charges of alleged insider trading.
Prosecutors said yesterday they would step up the search for the company's chairman as part of their investigation.
Banciao District Prosecutors' Office spokesman Huang Yu-yuan (
"We have confirmed that Chang's departure for Shanghai was scheduled a long time ago and had nothing to do with Thursday's raid and summons," Huang said.
Daniel Lee, meanwhile, has been working at the company's Shanghai branch for a long time, the prosecutors' office said.
The office also said that law enforcement authorities had launched the raid after the received reliable information that pointed to high-ranking Inventec Appliances managers manipulating the company's stock prices.
The Financial Supervisory Commission on Jan. 18 handed over its preliminary investigation of Inventec Appliances to prosecutors after monitoring the company for one year, the commission's acting spokesman Austin Chan (詹庭禎) said yesterday.
Declining to comment on Inventec Appliances, Chan said the commission would continue to investigate suspected illegal trading cases and hand over cases where the commission has strong suspicions to prosecutors.
He declined to talk about the number of companies under investigation, saying that not every company probed was necessarily involved in insider trading.
In addition to Inventec Appliances, publicly traded firms that were suspected of insider trading and handed over by the commission for judiciary investigations include BenQ Corp (
Ministry of Justice (MOJ) officials said streamlining the financial market and cracking down on major economic crimes had been the major goals of prosecutorial investigations over the past half year.
The MOJ has set a target of pursuing 40 suspected economic and financial irregularities by the end of this year, including at least 10 definitive cases, they said. That means that prosecutors will tackle at least four major corporate scandals in the coming months.
The officials said authorities would continue to prioritize dealing with five types of crimes: insider trading and stock price manipulation, embezzlement of corporate funds, accounting fraud and illegal lending, illegal corporate mergers and takeovers, as well as illegal private equity transactions and capital solicitation.
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