Sat, Jun 17, 2017 - Page 3 News List

Former KMT legislator guilty of stock manipulation

By Jason Pan  /  Staff reporter

The Kaohsiung branch of the Taiwan High Court yesterday upheld the conviction of former Chinese Nationalist Party (KMT) legislator Wu Kuang-hsun (吳光訓), who was charged with making about NT$22 million (US$724,137 at the current exchange rate) in illegal profits from stock manipulation.

Wu was handed a three-and-a-half-year prison term in yesterday’s second ruling, which reduced his sentence from the four years meted out in the first ruling by a district court.

In both rulings, the judges found Wu guilty of contravening the Securities and Exchange Act (證券交易法) for manipulating the stock price of Pro-Nets Technology Corp over several months in 2008.

Wu said he would speak to his lawyers before deciding whether to appeal.

Wu was elected as a KMT legislator from a constituency in what was then Kaohsiung County in the 2004 year-end legislative election, serving one term from February 2005 to January 2008.

He had earlier served as chairman of then-Kaohsiung City-based Forwin Securities Investment, and was a member of the legislature’s Finance Committee from 2005 to 2007.

Investigators said that from April to May of 2008, Wu bought a large number of shares of Pro-Nets Technology, a company specializing in broadband and data communication, at between NT$11 and NT$13 per share.

Wu faced huge potential losses when the stock price dropped to about NT$6 in September that year.

From October to December of 2008, Wu manipulated Pro-Nets Technology shares by engaging in what is known as “wash sale” — selling shares at a loss and repurchasing them within a short period — repeating the scheme to create a false impression that the stock was being actively traded and that its price was rising, investigators said.

Wu was also embroiled in vote-buying allegations during the 2004 election campaign, with the probe continuing for several years.

He ran for a second term in 2008, but failed to get elected.

In December 2010, a district court found Wu guilty of vote-buying, saying that he distributed several million New Taiwan dollars to campaign staff and local vote brokers, and paid NT$500 each to some Kaohsiung residents for their vote.

He was sentenced to 34 months in prison.

Wu filed an appeal, but the Kaohsiung branch of the Taiwan High Court upheld the vote-buying conviction and sentence of 34 months, in addition to deprivation of civil rights for four years.

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