While sources have indicated that Yageo chairman Pierre TM Chen is currently being investigated by Taiwan's Investigation Bureau for suspicion of insider trading and breach of trust concerning Yageo's investments in passive component maker Ta-I Technology, Yageo has responded to the claims by filing a note with the Taiwan Stocking Exchange (TSE) that indicated that official document from the investigation authority stated that the government raid on the Yageo office on Friday, October 31 was in only in relation to Yageo's investment Ta-I and other issues concerning securities and exchange law.
The company was responding to media reports that stated the raid was to gather evidence against the company's chairman.
However, the Investigation Bureau has pointed out that Chen purchased a large number of Ta-I shares starting in 2005 at a price of NT$17-36 (US$0.52-1.09) per share. Chen made a profit of NT$1.1 billion after Ta-I's share price surpassed NT$200 in April 2007, as the market responded to expectations that Yageo would acquire Ta-I.
The Bureau also noted that Chen may have been involved in a breach of trust, as a number of Ta-I shares were purchased by Yageo and other companies, but under his name.
This is not the first controversy involving Yageo's investment in Ta-I. In January 2008, Taiwan's Fair Trade Commission (FTC) fined Yageo NT$4.4 million (US$136,000) after the company failed to clearly declare the details of the acquisition of Ta-I shares.
Then In February, Yageo and several of its affiliates with slapped with more fines totaling NT$21.6 million (US$689,556). The Financial Supervisory Commission (FSC) ruled at that time that Yageo and its affiliates failed to report 44 transactions between 2005 and 2008 that saw them acquire an accumulated 10% share in Ta-I.
Yageo still currently holds a 10% stake in Ta-I.
Article translated by Meiling Chen
