Asustek Computer Inc (華碩) yesterday said it would tighten internal controls amid allegations of insider trading involving several company executives and a subsidiary, data storage controller chip designer ASMedia Technology Inc (祥碩).
“In light of media reports about Asustek subsidiary ASMedia’s alleged involvement in insider trading, we will comply with the law, tighten corporate governance and implement the highest moral standards to improve internal control,” Asustek said in a filing to the Taiwan Stock Exchange.
On Monday, the stock exchange regulator alerted investors to unusual movements in ASMedia’s share price and ordered the company to make public its latest financial performance.
STOCK SURGE
From NT$53.20 on April 1, ASMedia’s share price surged more than 329 percent to NT$228.50 on July 7, stock exchange data showed.
The parent company’s statement also followed a report by the Chinese-language Next Magazine yesterday saying that an ASMedia shareholder wrote an e-mail to Asustek chairman Johnny Shih (施崇棠) accusing ASMedia management of insider trading.
The report said Shih had appointed Asustek CEO and ASMedia chairman Jerry Shen (沈振來) to investigate, and Shen found that several vice presidents at Asustek had pocketed millions of New Taiwan dollars from trading ASMedia shares.
ASMedia shares fell by their daily limit to NT$166 in Taipei trading yesterday.
COOPERATION
The company said in a separate stock exchange filing that it would also enhance internal controls and cooperate with the authorities over the insider trading allegations.
Last quarter, thanks to increased shipments of data storage controller chips used in Universal Serial Bus (USB) 3.1 protocols and those designed for Intel Corp’s latest motherboard products, ASMedia generated a net profit of NT$68 million (US$2.27 million), or NT$1.21 per share.
That represented an increase of 41.66 percent from the previous quarter and 122.7 percent from the a year ago, the company said.
The Investigation Bureau has launched a probe into the case, Lin Ling-lan (林玲蘭), head of the bureau’s economic crime prevention department, said without elaborating.
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