Former Procomp chair sentenced to 14 years for fraud

Former chairwoman of Procomp Informatics Ltd Sophie Yeh (葉素菲) was sentenced to 14 years in prison and received a fine of NT$180 million (US$5.4 million) yesterday, primarily for her role in a NT$7 billion accounting fraud at the chipmaker.

The punishment was one of the harshest given in the huge accounting scandal, which has also resulted in the convictions of 27 other executives at Procomp, once the nation's largest maker of gallium arsenide epitaxial-based (GaAs) communications chips used in mobile phones, according to the Shihlin District Court.

The scandal was uncovered after the chipmaker filed a restructuring plan last summer amid financial difficulties, as it defaulted on a bond payment of NT$6.3 billion in June last year.

"Yeh misled investors into believing that Procomp was a promising company by using illegal means to overstate the company's sales. That has led to a massive loss for investors and the company," Lei Wen-hua (雷雯華), an assistant to the judge in charge of the case, told the Taipei Times after the verdict was issued.

By doing so, Yeh violated the Securities and Exchange Law (證券交易法) and misappropriation law, Lei said.

Yeh will be able to file an appeal to the Shihlin District Court within 10 days after receiving the written papers.

"We will see what we can do after receiving the written verdict," said Procomp spokesman Yeh Meng-chuan (葉孟川), the younger brother of Sophie Yeh, who did not show up in court yesterday.

Yeh Meng-chuan said they do not rule out the possibility of filing an appeal. He was also sentenced to three years and two months in prison.

Sophie Yeh was released on bail of NT$80 million in May after sitting behind bars for a year.

"The judge's decision will be advantageous to the ongoing Procomp case at the civil court as judges here usually use the results as an important reference," said Wu Fu-hsing (吳復興), spokesman for the Securities and Futures Investors Protection Center.

More than 10,000 victims lodged damage claims for a total of some NT$6 billion, according to Wu.

Procomp was delisted from the nation's major stock market, the Taiwan Stock Exchange, in September last year because of the accounting fraud.

Procomp's stock price dived to a record low of NT$6.4 last June, a stark contrast to a high of NT$368 in March 2000.