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UMC headquarters, Taipei office raided over ‘insider trading’

Taiwanese prosecutors yesterday raided offices at United Microelectronics Corp (UMC, 聯電), the world’s second-largest custom-chip maker, as part of a probe into insider trading.

Prosecutors are investigating transactions that took place around April to July 2006, Lo Hsueh-mei (羅雪梅), a spokeswoman for the Hsinchu District Prosecutors’ Office, said by telephone yesterday.

A public relations official at UMC confirmed to the Taipei Times that the company’s Hsinchu headquarters and its Taipei office were searched yesterday afternoon over some of the company’s re-investments.

But the official, who requested anonymity, did not clarify which re-investments prosecutors were investigating nor confirm that the raid was connected to the insider trading probe.

The business news Web site cnYes.com said last night that the probe could be related to UMC’s purchases of shares of ProMOS Technologies Inc (茂德科技), the nation’s third-largest maker of computer memory chips, in 2006. It did not cite sources.

News of the raid came on the same day the company announced it would spend as much as NT$4.21 billion (US$134 million) to buy back 1.51 percent of its shares on the open market to prop up distressed share prices.

Shares of UMC closed up 2.7 percent at NT$13.3 yesterday on the Taiwan Stock Exchange. The stock has declined 34 percent this year and touched a historic low of NT$12.7 on Friday.

UMC said it would pay NT$9.31 to NT$21.05 each for 200 million shares that it would then cancel. The buyback will run from today to Oct. 27, it said.
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