Prosecutors are investigating a criminal complaint against directors appointed by Carlyle Group LP to the board of one of the nation’s biggest broadcasters over an alleged breach of their duties during efforts to offload the private equity firm’s stake.
The three Eastern Broadcasting Co (EBC) directors — Gregory Zeluck, a Hong Kong-based managing director with Carlyle, former Carlyle managing director Alex Ying (殷尚龍) and EBC’s Carlyle-appointed chairman Joseph Fan (范瑞穎) — were accused of passing confidential company information to a potential investor last year without the board’s knowledge, according to a complaint filed on behalf of EBC with the Taipei District Prosecutors’ Office obtained by Bloomberg.
Prosecutors are examining the evidence and no one has been charged, Taipei District Prosecutors’ Office spokesman Chang Chieh-chin (張介欽) said by telephone.
Zeluck and Fan reported for questioning in Taipei on Tuesday last week, local media including the China Times reported.
“We think this is a frivolous action,” Daniel Song (宋耀明), a Taipei-based lawyer for Zeluck, said by telephone. “When Carlyle invested in EBC, the major shareholders in the companies signed a shareholders’ agreement which allows every shareholder to disclose corporate information to potential buyers when the shareholder intends to sell their shares.”
Divulging trade secrets and breach of trust are criminal offenses, with a maximum penalty of up to five years in jail.
The inquiry marks the latest twist in a saga that began when the Washington-based private equity firm entered the nation’s lucrative cable TV industry more than 10 years ago.
While the firm successfully exited Eastern Broadcasting’s affiliate, the attempts of cable operator Kbro Co — in a 2010 deal worth US$1.2 billion — to sell EBC have met with regulatory challenges.
A plan to sell EBC for US$370 million to US film producer Dan Mintz, chief executive officer of California-based DMG Entertainment, was stymied by Taiwan’s strict media-ownership rules, as was last year’s deal with Taiwan Optical Platform Co for US$351 million.
The complaint to Taiwan prosecutors was filed by Winston Hsieh, a non-voting member of EBC’s board.
“I can understand they wanted to sell their stake, but they must do it in compliance with the laws,” Hsieh said by telephone. “Responsible officers have an obligation to protect company secrets from potential competitors and other outsiders. This is not a publicly listed company and this information is very privileged.”
A group of Taiwanese-American and Tibetan-American students at Harvard University on Saturday disrupted Chinese Ambassador to the US Xie Feng’s (謝鋒) speech at the school, accusing him of being responsible for numerous human rights violations. Four students — two Taiwanese Americans and two from Tibet — held up banners inside a conference hall where Xie was delivering a speech at the opening ceremony of the Harvard Kennedy School China Conference 2024. In a video clip provided by the Coalition of Students Resisting the CCP (Chinese Communist Party), Taiwanese-American Cosette Wu (吳亭樺) and Tibetan-American Tsering Yangchen are seen holding banners that together read:
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