Two days after news of alleged insider-trading investigations broke, Taiwanese mobile phone maker BenQ Corp (明基) said media speculation about company executives engaging in illegal stock trading was unfounded.
BenQ chairman Lee Kun-yao (李焜耀) said in a public letter yesterday that he and the company were cooperating fully with authorities.
But, "media speculation that BenQ might be involved in insider trading or irregularities involved in the selling or buying of stock, is false," Lee said in the letter.
He also said any negative reports about BenQ's senior financial executive Eric Yu (
Yu was detained on Tuesday on suspicion of illegally selling stock options via four overseas-registered companies -- including Creo Venture Corp -- ahead of the anouncement of massive losses last March.
Lee said the establishment of Creo Venture had been aimed to lure talent overseas and to deal with bonus issuance for employees, rather than to benefit any individual.
Meanwhile, the Taoyuan District Prosecutors' Office yesterday confirmed that Lee was prohibited from going abroad.
"We decided to ban him [Lee] from leaving the country because we may need him to help us with our investigation," said John Chang (張進豐), spokesman for the Taoyuan District Prosecutors' Office. "But we have yet to decide whether to summon him for questioning at this point."
Prosecutors had discovered that Yu was not in a position to make the final authorization of the entire share trading, although Lee was, making Lee someone prosecutors would like to question, Chang said.
Shares of BenQ rallied 6.9 percent, the daily limit, to NT$13.95 yesterday on speculation that the handset maker would become an acquisition target, reversing an earlier daily-limit decline.
Trading volume spiked to a three month high with 118.83 million shares changing hands yesterday on the Taiwan Stock Exchange. On Tuesday, only 5.28 million shares changed hands.
"For buyers aiming at obtaining control over flat-panel maker AU Optronics Corp (友達光電), it will be a bargain deal to buy BenQ shares," said Helen Chen (陳佩君), an analyst with Polaris Securities Co (寶來證券).
BenQ holds about a 13 percent stake in AU Optronics, the world's
third-largest maker of liquid-crystal-display (LCD) panels for computers and
televisions.
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