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April 13, 2007 1:12 am

Taiwan widens insider trade probe

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Taiwan’s crackdown on alleged insider trading widened on Thursday as prosecutors said they had questioned two top executives at BenQ, the struggling Taiwanese electronics company, and were targeting Inventec Appliances, another electronics group.

The Panchiao district court prosecutors’ office said its investigators searched Inventec offices in a Taipei suburb on Thursday and suspected a “double-digit” num­ber of executives at the company of being involved in insider trading.

The raid followed an announcement by prosecutors in Taoyuan county that they were targeting BenQ’s two top executives as suspects in an insider trading investigation that began last month.

Lee Kuen-yao, BenQ’s chairman, and Sheaffer Lee, the company’s president, were released on bail of T$15m and T$10m ($453,000 and $302,000), respectively, late on Wednesday after seven hours of questioning in the case, said a spokesman of the prosecutor’s office. The two BenQ executives have both denied any wrongdoing and said they were willing to co-operate with any investigation.

Observers expect that more companies will be targeted in the coming months. Along with BenQ, prosecutors last month also raided Veutron, an affiliate of Taiwan’s biggest memory chipmaker, Powerchip.

All three inquiries were launched on an initiative of the Financial Supervisory Commission, Taiwan’s market regulator. An official at the Taiwan Stock Exchange said the bourse had informed the regulator last year of indications for insider trading in a series of cases.

The news drove BenQ shares only slightly lower as traders said expectations of more trouble had already been priced in since prosecutors raided BenQ and detained Eric Yu, its chief financial officer in March. BenQ shares closed down 0.8 per cent at T$12.90 on Thursday.

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