For many years, Taiwan’s investors have been complaining about poor management integrity and corporate governance. Last week, they expressed resentment again over alleged insider trading in Taiwan Semiconductor Manufacturing Co’s (TSMC) acquisition of a local solar cell maker’s shares.
On Wednesday, TSMC announced the purchase of a 20 percent stake in Motech Industries Inc for US$193 million. No one seemed surprised by the news as rumors about the deal had been reported by several newspapers, spread among local securities houses and discussed on several Internet bulletin boards.
As usual, both TSMC and Motech denied any wrongdoing and financial regulators said they would probe any insider trading violations. A major issue, however, is that the deal is not just an isolated case but one of a series of examples of possible insider trading in recent months.
The merger of LCD panel makers Innolux Display Corp and Chi Mei Optoelectronics Corp provides a good example. The companies’ shares had already surged ahead of their merger announcement on Nov. 14 amid market speculation about a possible deal. While Chi Mei issued a stock exchange filing on Nov. 13 to deny media reports about the deal, it seemed that company management, deal advisers, market traders and big stakeholders had allegedly shared confidential information before the deal was announced to the public.
The same kind of suspicious activities also underpinned two recent mergers between local chip packaging and testing companies — the merger between Advanced Semiconductor Engineering Inc and Universal Scientific Industrial Co on Nov. 17 and the deal between Chipbond Corp and International Semiconductor Technology Ltd on Tuesday.
It was obvious that Chi Mei’s exchange filing was incompatible with what it was planning. Unfortunately, the company’s practice of cheating shareholders and stock investors resulted in a fine of only NT$30,000 from the stock exchange regulator.
There is a lot of evidence that small and individual investors have fallen victim to a situation in which some have more information about potential transactions than others — known as information asymmetry. Why then does the regulator do nothing about it?
Some say that the jailing last week of former Procomp Informatics Corp chairwoman Sophia Yeh (葉素菲) — five years after the chipmaking company became insolvent following an NT$7 billion accounting fraud scandal — served to reassure market skeptics.
But that shouldn’t be viewed as a triumph because we have also seen several suspects in high-profile corporate scandals, insider-trading incidents and accounting abuse cases in the past few years flee the country after they were indicted.
Even though Yeh faces 14 years in prison and a fine of NT$180 million for her role in the accounting fraud, nearly 10,000 Procomp shareholders are out of pocket and chances are slim that they will ever see much of the NT$5.58 billion (US$173.5 million) in compensation they want.
Regardless of the type of corporate fraud, fast and effective prosecution of financial crimes is essential to help investors gain confidence in the regulator’s supervisory mechanism and the government’s effort to reform the financial market.
Saudi Arabian largesse is flooding Egypt’s cultural scene, but the reception is mixed. Some welcome new “cooperation” between two regional powerhouses, while others fear a hostile takeover by Riyadh. In Cairo, historically the cultural capital of the Arab world, Egyptian Minister of Culture Nevine al-Kilany recently hosted Saudi Arabian General Entertainment Authority chairman Turki al-Sheikh. The deep-pocketed al-Sheikh has emerged as a Medici-like patron for Egypt’s cultural elite, courted by Cairo’s top talent to produce a slew of forthcoming films. A new three-way agreement between al-Sheikh, Kilany and United Media Services — a multi-media conglomerate linked to state intelligence that owns much of
The US and other countries should take concrete steps to confront the threats from Beijing to avoid war, US Representative Mario Diaz-Balart said in an interview with Voice of America on March 13. The US should use “every diplomatic economic tool at our disposal to treat China as what it is... to avoid war,” Diaz-Balart said. Giving an example of what the US could do, he said that it has to be more aggressive in its military sales to Taiwan. Actions by cross-party US lawmakers in the past few years such as meeting with Taiwanese officials in Washington and Taipei, and
Denmark’s “one China” policy more and more resembles Beijing’s “one China” principle. At least, this is how things appear. In recent interactions with the Danish state, such as applying for residency permits, a Taiwanese’s nationality would be listed as “China.” That designation occurs for a Taiwanese student coming to Denmark or a Danish citizen arriving in Denmark with, for example, their Taiwanese partner. Details of this were published on Sunday in an article in the Danish daily Berlingske written by Alexander Sjoberg and Tobias Reinwald. The pretext for this new practice is that Denmark does not recognize Taiwan as a state under
The Republic of China (ROC) on Taiwan has no official diplomatic allies in the EU. With the exception of the Vatican, it has no official allies in Europe at all. This does not prevent the ROC — Taiwan — from having close relations with EU member states and other European countries. The exact nature of the relationship does bear revisiting, if only to clarify what is a very complicated and sensitive idea, the details of which leave considerable room for misunderstanding, misrepresentation and disagreement. Only this week, President Tsai Ing-wen (蔡英文) received members of the European Parliament’s Delegation for Relations