The High Court on Wednesday overturned the ruling of a lower court and found three Taiwanese guilty of helping Chinese over-the-top (OTT) service provider iQiyi illegally operate in Taiwan.
There is direct evidence showing that Fan Li-ta (范立達), Chao Shan-chen (趙善真) and Yang Ming (楊鳴) were under the substantial influence of iQiyi’s Beijing headquarters as they conducted business in Taiwan, the court said in its ruling.
The three were acquitted by the Shilin District Court in April last year due to “insufficient evidence” they breached the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (臺灣地區與大陸地區人民關係條例), which prohibits Chinese profit-seeking enterprises from carrying out business activities in Taiwan unless approved by the competent authority.
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However, based on the suspects’ confessions and the work plan of OTT Entertainment Ltd — the company where they worked as executives and which effectively operated as a subsidiary of iQiyi — it is believed that Beijing iQiyi provided operational funds to the company, the high court said.
The personnel, finance and organization of OTT Entertainment were also under the direct control of iQiyi in Beijing, making them instruments for the Chinese company’s illegal operations in Taiwan, rather than simply authorized distributors as initially stated, the high court said.
The firm’s application to establish a subsidiary in Taiwan was rejected by the Investment Commission in 2016.
Fan and Yang were each sentenced to five months in prison, with Chao given three months. The jail terms can be commuted to fines.
However, their combined salaries of about NT$40 million (US$1.23 million) earned over the three years the trio worked for the company was not considered the proceeds of crime, as prosecutors in the first trial in 2022 argued, and therefore will not be confiscated, the court said.
Fan, a former political commentator, said that the case was politically motivated and that he was considering appealing the verdict.
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