The Hsinchu District Court yesterday dismissed charges against Robert Tsao (曹興誠), former chairman of United Microelectronics Corp (UMC, 聯電), for allegedly helping the Taiwanese company invest in China.
The court also found in favor of former UMC vice chairman John Hsuan (宣明智) and Cheng Tun-chien (鄭敦謙), head of Fortune Venture Capital Corp (宏誠創投), a UMC affiliate, it said in a statement.
The three were indicted on charges of breach of trust and violating the Business Accounting Law (
"There was insufficient evidence that the defendants supplied He Jian Techonology (Suzhou) Co with UMC personnel, patents and trade secrets or helped it raise funds using UMC resources ... Therefore the charges do not stand," the statement read.
Hsinchu prosecutors said they would appeal the ruling.
The three defendants are currently abroad. UMC declined to comment on the court's ruling.
Taiwan limits investments in China on concerns over growing Chinese competition. The verdict may force the government to review its policy on local companies expanding across the Strait.
"The ruling will definitely be a boost to market sentiment," said Rick Hsu (
Andrew Wang, of Prudential Financial Securities Investment Trust Enterprise (保德信元富投信), said before the announcement that a positive ruling could remove lingering concerns over the company, adding that "the stock will probably rise on Monday."
Shares of UMC rose 2.2 percent to close at NT$21 yesterday before announcement of the verdict.
Tsao, 60, resigned as chairman of UMC in January last year after his indictment for allegedly helping He Jian set up a plant in 2002.
On July 19, the Taipei Administrative High Court overturned a decision by the Ministry of Economic Affairs to impose a NT$5 million (US$152,500) fine on UMC for investing in He Jian without regulatory approval. The ministry then appealed the case to the higher court.
The ministry accused Tsao and other company officials of providing technical know-how to He Jian in November 2001 without seeking government approval.
But the Taipei Administrative High Court said at the time that UMC's relationship with He Jian could not be classified as an investment, as the company provided only technical assistance to the Chinese chipmaker.
The court also ruled that there was insufficient evidence to prove that UMC had invested in He Jian.
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