Investigations into fraud at XPEC Entertainment Inc (樂陞科技) were completed yesterday, with prosecutors charging the alleged principal figures and seeking the maximum 30-year prison sentence for XPEC chairman Aaron Hsu (許金龍).
It is one of the nation’s largest cases of alleged financial fraud in recent years, with alleged involvement by prominent businesspeople and media personalities, including television show host Sisy Chen (陳文茜), former minister of economic affairs Yin Chi-ming (尹啟銘) and former Taipei deputy mayor Lee Yong-ping (李永萍), who served as independent directors on XPEC’s board.
The Taipei District Prosecutors’ Office said the three independent directors of the computer gaming company had violated provisions of the Securities Exchange Act (證券交易法) and a separate investigation into their involvement is likely to result in further charges.
Prosecutors are also expected to charge Yang Jui-jen (楊瑞仁), a convicted financial fraudster known as the “10 Billion Dollar Bandit” from the 1994 Waterland Securities (國票) fraud case.
Yang has admitted to XPEC stock price manipulation and has promised to repay the profit.
The main indictment was against Hsu, Yang, XPEC chief financial officer Hsieh Tung-po (謝東波), former XPEC interim chairman Lee Po-heng (李柏衡), company attorney Pan Yen-chou (潘彥州) and five others, who have been charged with fraud, insider trading, stock manipulation, non-arm’s length transactions, fraudulent financial reporting and other violations of the Securities Exchange Act (證券交易法) and the Business Entity Accounting Act (商業會計法).
Three foreign nationals were also implicated in the case and warrants have been issued for their arrest should they enter Taiwan. Prosecutors said they would cooperation with foreign law enforcement agencies.
Taipei Deputy Chief Prosecutor Chang Chieh-chin (張介欽) said the foreign nationals are Chinese gaming industry tycoon Wang Ji (王佶), CEO of China’s Zhejiang Century Huatong Group Co (世紀華通); Japanese businessman Kashino Yoshaki, the former CEO of Bai Chi Gan Tou Digital Entertainment Co (百尺竿頭); and another suspect, surnamed Lin (林), who has permanent resident status in Japan.
Hsu allegedly colluded with Wang and Kashino to manipulate XPEC stock price, which resulted in a collective loss of NT$4.86 billion (US$154.87 million at the current exchange rate) for about 30,000 investors, Chang said.
Prosecutors alleged that Hsu sought illegal arrangements, undermined management, deceived company directors and executives and colluded with outside firms to manipulate the stock price.
“Hsu used a shell company registered overseas to divert about NT$4 billion of illegal profits, then used the money to manipulate Taiwan’s stock market to make more money. His actions undermined the business interests of XPEC, created havoc on the stock market and resulted in significant financial losses for investors,” Chang said.
Prosecutors have requested Hsu be held incommunicado, citing the likelihood of his fleeing the nation, colluding with other witnesses and tampering with evidence.
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