Lite-On Technology Corp (光寶科技) founder Raymond Soong (宋恭源) was yesterday released on NT$30 million (US$1.06 million) bail after being questioned over alleged insider trading, the Taipei District Prosecutors’ Office said.
Close friends of Soong who allegedly received insider information from him were also released after being questioned by prosecutors.
Soong’s friend Shan Ya-wen (單雅文) was freed on NT$30 million bail and his sister released on NT$3.5 million bail.
Photo: CNA
Another friend, Yu Ming-chang (游明昌), and his wife and son were each released on NT$1 million bail.
Yu is a brother-in-law of Representative to Japan Frank Hsieh (謝長廷).
Prosecutors did not disclose any other details of the ongoing investigation.
Soong and his friends are suspected of buying a large number of Lite-On Semiconductor Corp (LSC, 敦南科技) shares in the middle of 2019 before it was publicly known that the company, a Lite-On Technology subsidiary that Soong chaired, would be sold to US firm Diodes Inc.
Diodes first made public its plan to buy LSC on Aug. 9, 2019, when it offered to pay NT$42.50 for each LSC share.
On the following three trading days in Taipei the stock rose 26.5 percent from NT$32.10 to NT$40.60, a surge that was not surprising considering the offer price, Taiwan Stock Exchange data showed.
The shares traded between NT$39 and NT$42 until the sale was completed at the end of November last year.
Soong and Shan bought 10.165 million LSC shares in July 2019, before the proposed acquisition was announced, when they were trading between NT$31.30 and NT$35.10, prosecutors said.
They sold the shares in October and November last year just before the deal closed, when they were trading at about NT$42 a share, they said.
As a result, Soong and Shan made a profit of about NT$60 million, prosecutors said.
Yu, his wife and son, Shan’s sister and other friends with whom Soong allegedly shared the information also profited, they said.
Soong and his friends face being charged with breaches of insider trading clauses in the Securities and Exchange Act (證券交易法).
Prosecutors on Monday night raided Lite-On Technology’s headquarters in Taipei’s Neihu District (內湖) and several other locations.
Soong still has an office at the company’s headquarters, despite retiring as chairman in July last year.
Tom Soong (宋明峰), his son, is currently the chairman.
The company, a major manufacturer of LEDs and computer peripherals, said in a statement on Monday that the allegations involve Raymond Soong personally and the investigation would not affect the company’s operations.
Lite-On Technology shares yesterday fell 2.22 percent to close at NT$57.20, underperforming the TAIEX, which closed up 0.21 percent at 15,853.09.
The company posted earnings per share of NT$4.31 for last year, compared with NT$4.03 in 2019.
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