Tai Tung execs questioned over insider trading
Authorities yesterday questioned the owner, his son and executives of a telecommunications services company at the center of a corruption scandal in Taipei over alleged insider trading.
The Taipei District Prosecutors’ Office questioned Tai Tung Communication Co (台通光電) employees and executives — including its owner, Lee Ching-huang (李慶煌), and his son, Lee Chia-hao (李嘉豪), who was placed in pretrial detention with restricted communication.
The New Taipei City-based firm is the parent company of Taiwan Intelligent Fiber Optic Network Consortium (Taifo, 台灣智慧光網), which investigators last month accused of providing kickbacks to Taipei City Councilor Chen Chung-wen (陳重文) of the Chinese Nationalist Party (KMT) related to a city government project to install police surveillance systems and provide networking and data transmission services.
Yesterday, Agency Against Corruption units and Taipei prosecutors searched nine Tai Tung offices and employee residences, while serving summonses to executives related to alleged insider trading that led to profits of about NT$100 million (US$3.07 million), prosecutors said.
The agency and prosecutors alleged that Tai Tung, a publicly listed company on the Taiwan Stock Exchange, had announced a stock buyback on March 8, but that
Lee Ching-huang, members of his family and some employees had prior knowledge of the deal, enabing them to purchase stock ahead of time.
A bail court hearing approved the pretrial detention of Lee Chiahao, who holds the title of special assistant to the owner.
Prosecutors listed him as facing possible charges for contravening the Securities and Exchange Act (證券交易法) and requested that he be detained due to the possibility of collusion and tampering with evidence, a bail court hearing filing said.
Lee Ching-huang’s wife, Hsieh Yen-chun (謝燕春), was released on NT$3 million bail, while his exwives, surnamed Huang (黃) and Lee (李), were released on bail of
NT$3.5 million and NT$2 million respectively. A company executive surnamed Shih (石) was released on NT$500,000 bail, while Lee Ching-huang was released without posting bail.
The Agency Against Corruption said that the investigation into insider trading stemmed from an earlier probe into reported corruption and kickbacks at Taifo, which had secured a NT$550 million contract with the Taipei City Government to supply police surveillance systems and networking and data transmission services.
An investigation found evidence that Chen had questioned officials and allegedly pressured the government to approve a higher budget for the contract with Taifo, whose chairman is Lee Ching-huang.
Investigators said that several million dollars in alleged kickbacks had flowed to accounts controlled by Chen.
The agency and prosecutors on March 14 initiated searches related to that investigation, detaining and questioning Chen and Lee Chinghuang in the process, along with other suspects.
Chen was detained as telephone records indicated he had called witnesses in an attempt to collude with them, while Lee Chiang-huang was released on a NT$3.5 million bill, prosecutors said.
The alleged insider trading activity was found while examining money flows and bank transactions in that case, prosecutors said.