By Ted Chen,The China Post
TAIPEI, Taiwan — Prosecutors yesterday initiated investigations into Greatek (超 豐 ) and Toptrade Securities (大華證卷) executives for alleged insider trading in a 2011 merger deal. The merger deal refers to Greatek’s bid to acquire Powertech in 2011. Prosecutors are questioning managers of Toptrade Securities and Greatek for suspected insider trading, in addition to 10 related people who had allegedly purchased Powertech (立成) shares in bulk, prior to the Dec. 15, 2011 public announcement of the merger, which was to take place at NT$25.28 per-share. Currently a manager at Toptrade surnamed Huang, and a manager surnamed Chen at Greatek are under investigation.
Although no suspicious activities were found in the managers’ brokerage transaction records, the prosecutors found that accounts belonging to the friends and family members of the managers contained evidence of irregularities.
Transaction records belonging to people related to the managers indicated that as many as 500,000 shares were purchased by Chen’s relations, rendering NT$3 million in allegedly illegal profit. While Huang’s relations purchased a total of 1 million shares, rendering NT$7 million in alleged illegal profits. The shares were then sold in several phases during December 2011, and January 2012.
Prosecutors indicated that at the time, Powertech shares had been trading at around NT$20, and that the bulk-purchase of shares ahead of announcements for the NT$25.28 acquisition price represents improper exploitation of non-public information.
Prosecutors concluded that the alleged incident of insider trading concerned personal acts of malfeasance committed by the managers involved, indicating that the company’s operations were neither involved nor affected.