Prosecutors yesterday indicted China Development Financial Holding (中華開發金控) president Angelo Koo (辜仲瑩) and 10 others on charges of insider trading and breach of trust.
China Development Financial, the nation’s 13th-biggest financial group by assets, is suspected of benefiting certain major shareholders who passed themselves off as foreign investors and reaped profits by using insider information during the firm’s attempted hostile takeover of smaller rival Taiwan International Securities Corp (金鼎證券).
CHARGES
Koo and his associates are charged with violating the Securities and Exchange Act (證券交易法) and the Financial Holding Company Act (金控法), said Taipei District Prosecutors’ Office spokesperson Lin Jinn-tsun (林錦村).
“[The accused] should have had a high level of ethical responsibility,” he said. “[They] have violated fair trade rules and caused disturbances in the financial market.”
Following a probe into China Development Financial’s acquisition of Taiwan International Securities, prosecutors alleged that the deal was filled with insider trading and manipulation of stock prices.
PUNISHMENT
China Development Industrial Bank (中華開發工業銀行), an affiliate of China Development Financial, is also suspected of illegitimate transactions. Prosecutors allege China Development Industrial Bank purchased shares in hundreds of companies at relatively high prices, then sold them to private equity funds at low prices to benefit certain groups.
Prosecutors have asked for heavy sentences, alleging that Koo illegally obtained more than NT$100 million (US$3 million). Although Koo has repeatedly denied the accusations, he may face up to seven years in jail if convicted.
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