Banciao prosecutors yesterday raided Inventec Appliances Corp (英華達), a local handset maker that also produces iPod music players for Apple Inc, looking for evidence to support charges of alleged insider trading.
The raid began at 1pm, when prosecutors and a group of special agents from the Ministry of Justice's Investigation Bureau arrived at the company's headquarters in Wugu (五股), Taipei County. When the raid was completed, prosecutors and special agents escorted 22 members of staff back to their offices for further questioning, which was still ongoing as of press time.
"We have reliable information that alleges this company's high-ranking managers manipulated the company's stock price," said Banciao District Prosecutors' Office Spokesman Huang Yu-yuan (黃玉垣).
In response, Inventec Appliances Corp said in a statement "the company's operations will not be affected by the search. The company will cooperate with the investigation and is awaiting the results."
Inventec is the latest in a string of listed companies under investigation for insider trading, following Veutron Corp (
Inventec shares fell 1.11 percent to NT$80 on the Taiwan Stock Exchange yesterday, underperforming the benchmark TAIEX index's 0.11-percent loss.
A large proportion, about 60 percent to 65 percent, or NT$95.65 billion (US$2.89 billion), of Inventec's total revenues for last year were derived from making the popular iPod digital music player for Apple, while its handset business accounted for just 10 percent.
Revenues in the first quarter plunged 43 percent to NT$10.65 billion from NT$24.96 billion a year earlier. As of last month, the electronics company said it had 13,817 employees, down roughly 14 percent from its 16,000-strong workforce last year.
Inventec is 45 percent owned by local computer maker Inventec Corp (英業達).
Helen Chen (陳佩君), who tracks the mobile phone industry for Polaris Securities Co (寶來證券), was not shocked by the insider trading allegations.
"The stock price of Inventec was like a rollercoaster last year. It is not easy to judge whether the movement of the stock price was linked to the alleged insider trading," Chen said.
Inventec shares rallied to a record high of NT$236.5 on Feb. 3 last year, but tumbled 62 percent from their peak to a closing price of NT$91 on the last trading day of last year.
Chen retained her "neutral" rating for Inventec on lukewarm momentum, while foreign investment research houses Merrill Lynch and Goldman Sachs downgraded the stock to "sell" last month.
Inventec said net income fell 31.33 percent to NT$2.06 billion, or NT$4.72 per share, last year, compared to NT$3 billion, or NT$7.28 a share, earned in the previous year.
Additional reporting by Jimmy Chuang
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