The Taipei District Court on Friday ordered former Pacific Electric Wire and Cable (PEWC, 太平洋電線電纜公司) chairman Jack Sun (孫道存), former chief financial officer Hu Hung-chiu (胡洪九) and 20 other top company executives and board members to pay NT$7.45 billion (US$253.34 million) compensation to the individual investors who sustained financial losses in an embezzlement scandal.
The Securities and Futures Investors Protection Center in 2006 filed a civil lawsuit to seek financial compensation on behalf of 24,772 individual investors.
The case originally involved 279 defendants, mostly PEWC executives and people associated with the company, information from the center showed.
Over 12 years of litigation, various settlements were reached, decreasing the number of defendants to 22 and reducing the original compensation amount from about NT$8 billion to NT$7.451 billion, the information showed.
It was the court’s first ruling and can be appealed.
The court based the compensation amount on PEWC having released fraudulent financial reports, which had a direct bearing on the financial losses incurred by the investors and breached government-regulated market mechanisms, the court said in a statement.
“By doing so, PEWC undermined investors’ confidence in the health and fairness of the securities markets,” it said.
“It also impeded the investors’ judgement regarding the company’s financial performance, revenue earning, the competency of its management team and its ability to rate the risk and assess the return on investment,” the statement added.
The compensation figure could be much higher, the center said, added that taking into account the interest accrued from 2006 to this year, the defendants would have to pay more than NT$10 billion.
Besides Sun and Hu, the defendants who were ordered to pay compensation included former PEWC chairman Tung Ching-yun (仝清筠); Tung’s former secretary, Huang Ching-lin (黃靜琳); former vice chairman Miao Chu-yi (繆竹怡); and former board member Tung Hsiu-chun (仝秀君).
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