Academia Sinica President Wong Chi-huey (翁啟惠), who was accused of insider trading following his endorsement of biotechnology company OBI Pharma despite its failed cancer drug trials, returned to Taiwan on Friday last week. He faces a mountain of “trials” of his own.
These days, with the ubiquitous Internet, there are few places for conceit to hide for long. Any deception would come back and slap people in the face: Honesty is the best policy.
When investing in the technology sector, the common practice is to be completely upfront about what you know. Anything short of full disclosure is sure to get you in a bit of a hole: “What a tangled web we weave,” as the saying goes.
It seems that Wong has been, to a degree, guilty of this. There do seem to be questions over the tax and legal implications concerning the Optimer shares that his daughter, Wong Yu-shioh (翁郁琇), originally owned: how she came about the financial wherewithal to purchase OBI Pharma shares; to what extent the shares were exchanged for Optimer shares; whether it has anything to do with Wong Chi-huey’s transfer of technology; whether the shares were given as a gift and the tax implications thereof; whether the capital flows from the Wongs divesting themselves of more than 1,000,000 OBI Pharma shares were completely legal; and when Wong Chi-huey sold the OBI Pharma shares on behalf of his daughter, was he doing it on her behalf, or was it a case of those shares being under her name, but actually belonging to him?
These are the facts: On Feb. 18, Wong Chi-huey received a telephone call from an E.Sun Securities employee, after which he sold 10,000 OBI Pharma shares on his daughter’s behalf.
In all honesty, due to the moral factors and the effects on social interest, the feeling is that Wong should not be dabbling in shares while he is running Academia Sinica.
However, then came the mumblings in the media and on political talk shows of insider trading and stock market manipulation.
People were starting to question what exactly Wong Chi-huey’s intentions were.
His daughter owns about 2 million shares. Would insider trading not involve selling the whole lot? What kind of inside trader would only sell such a small number of shares? That same day, 2.09 million OBI Pharma shares were traded.
The suggestion that the sale of merely 10,000 shares was done in an attempt to manipulate the market is laughable.
It must be a real pain for prosecutors when the cases they are investigating are tried by media and the court of public opinion.
It is entirely contradictory to on the one hand say that Wong Chi-huey selling 10,000 OBI Pharma shares the evening before the company announced that the cancer drug tests failed to return satisfactory results was a case of insider trading and a sign that he did not like the company’s prospects, and on the other, to say that when he endorsed the company three days after the failed trials, he did so because he liked its prospects.
Prosecutors are investigating if any OBI Pharma employees — the president, the managing director, the director of research and development, the chief financial officer or the associate general manager — were engaged in short-selling of the stocks using pseudonyms or shell companies.
However, does this cohere with the criticism of Wong Chi-huey’s endorsement of the drugs, in which he said that the failure of the tests does not necessarily mean the drugs do not work?
Too many questions, too many contradictions.
Chang Kuo-tsai is a retired National Hsinchu University of Education associate professor and a former deputy secretary-general of the Taiwan Association of University Professors.
Translated by Paul Cooper
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