BenQ Corp (明基) chairman Lee Kun-yao (李焜耀) and a senior aide have been cleared by the Taiwan High Court of insider trading in a decision that could restore investor confidence in the company.
The court confirmed a lower court decision absolving Lee and a former company president of guilt when BenQ sold stock options via four overseas companies ahead of the announcement of massive losses sustained by the company.
Sentences and fines have instead been handed down to three former financial and accounting executives accused of illegally trading about 6 million to 7 million company shares before releasing its 2005 fourth-quarter earnings report in March the following year.
Former BenQ chief financial officer Eric Yu (游克用) was given a four-year sentence and a NT$20 million (US$693,400) fine. Sentences of up to three-and-a-half years and fines between NT$1 million and NT$3 million were also given to two other senior associates.
All the findings can still be appealed to the Supreme Court, which the company’s lawyers have indicated would happen.
“Lee is relieved at the decision, but he also believes in the innocence of his three colleagues. As a result, we will continue to appeal,” Hsiao We-teh (蕭維德), one of Lee’s lawyers, said after the ruling was announced.
Prosecutors have not indicated whether they would file an appeal.
Taoyuan-based BenQ is one of the nation’s largest makers of branded consumer electronics. However, losses accumulated in 2005 after the company failed to spark interest in a cellphone arm acquired from Germany’s Siemens AG a year earlier, leading to the allegations of insider trading.
The company has maintained that the stock options were transferred outside the company to attract foreign talent and distribute employee benefits. A statement called the decision to charge the five executives a “legal loophole” that should be fixed.
“The legal amendments and verdicts reached by the first and second rulings are evidence that the relevant authorities understand and recognize the methods used by the BenQ group,” the company said in a statement.
“Yu also believes that the court will declare him innocent in the end,” it added.
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