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Robert Tsao on Thursday pledged to step down as chairman of Taiwan’s United Microelectronics (UMC), saying he was attempting to protect the world’s second-largest contract chipmaker from “political oppression”.
The move came as the Taiwan Stock Exchange said it was examining stock transactions by UMC executives for potential irregularities. While the move is unlikely to result in insider trading charges, it marks a further escalation in the power struggle between Mr Tsao and the island’s market regulators.
Mr Tsao said he would resign from his post at UMC’s annual meeting in March and expressed confidence in Jackson Hu, the chief executive that he has groomed as his successor.
“[UMC’s] highly professional and international operating style has met with political manipulation, and as a result [people] can’t tell right from wrong any more,” Mr Tsao said. “I hope that after this announcement all external criticism and the pressure from the authorities can be directed at me personally only, and not hurt the company and its shareholders.”
Officials at the TSE and the Financial Supervisory Commission, the cabinet-level regulator, said yesterday the TSE had two weeks ago started looking into UMC stock deals between late September and early December. “This is a regular move which will be taken in every case where we find unusual stock movements,” the FSC said.
UMC’s stock fell sharply on December 14 after the company said it would revise its financial statements for 2002, 2003 and 2004 in response to a request from the US Securities and Exchange Commission.
The company announced the planned revisions through an English-language press release on December 13, but failed to disclose it to Taiwan investors simultaneously in Chinese before the start of trading on the local bourse on December 14.
This week Mr Tsao publicly attacked the regulator, denying that the delayed disclosure had hurt Taiwan shareholders and maintaining that UMC executives had “left their hands out of the stock market”.
But the TSE said UMC executives were found to have sold shares between September, when the company received the SEC comments, and early December, when UMC made public its planned accounting revisions.
The FSC called the ongoing TSE examination a regular move and emphasised that the case had not been transferred to the market regulator for a formal probe.