The China Post staff
Prosecutors raided the Hsinchu and Taipei offices of Veutron Corp., an affiliate of Powerchip Semiconductor Corp.(PSC), as well as the residence of Frank Huang, concurrently chairman of both firms, trying to search evidence against alleged insider trading of Veutron’s shares.
During the raiding operation, prosecutors and investigators found all the facilities and equipment at Veutron’s plant in Hsinchu Science Park were all taken away, but they confiscated relevant evidence documents at Huang’s residence in a luxurious building in Taipei. In addition, eight people associated with the alleged insider trading scandal were brought back to prosecutors’ office for interrogation.
Prosecutors will move to interrogate Frank Huang to better understand his alleged role in the insider trading of Veutron shares.
The share price of the firm galloped all the way to a high of NT$44 right before the Chinese New Year holidays from a low of NT$7 recorded in late October 2006.
Some investors tipped off investigators to the abnormal rallies of Veutron’s share prices mainly resulted from insider trading.
Meanwhile, Veutron, an affiliate of leading memory chipmaker Powerchip Semiconductor Corp., confirmed in a statement last night that its premises had been searched but said it had “no knowledge of what prosecutors were looking for.”
It said neither Veutron’s affiliates nor the company’s board of directors and supervisors had traded Veutron shares during financial engineering, which included capital reduction and private share placement since last year.
Other members of the Powerchip group were not involved in the probe and Veutron would cooperate fully in subsequent investigations, the statement said. Veutron’s comments followed media reports that prosecutors had searched the company and the home of its chairman Frank Huang over suspected irregular trading earlier Thursday.
Veutron is a maker of scanners and components, while Powerchip Semiconductor makes dynamic random access memory chips. Powerchip Chairman Frank Huang also heads Veutron, owning 6.13 million shares in Veutron, according to filings to the Taiwan Stock Exchange, about 5.6 percent of the outstanding stock. Veutron has a market value of NT$2.6 billion based on today’s closing share price.
Shares of Veutron have more than quadrupled in the past six months, closing at NT$37.70 in Taipei yesterday. It was the second probe into alleged insider trading this week after prosecutors raided BenQ Corp’s offices on Tuesday and detained a company executive for suspected irregular trading of some seven million shares.