SAN FRANCISOProsecutors who searched the offices of Taiwan foundry United Microelectronics Corp. (UMC) Wednesday (Aug. 27) were looking for information about a personal investment in shares of ProMos Technologies Inc., reportedly by UMC Chairman Stan Hung.
Reuters reported the search of UMC offices Wednesday. On Thursday, Reuters reported that prosecutors questioned Hung on his possible involvement in the investment in ProMOS and quoted a spokesperson from the Hsinchu District Prosecutor's Office as saying that Hung was allegedly involved in insider trading. The spokesperson said Hung personally purchased shares of ProMOS before UMC invested in ProMOS in July 2006, according to the Reuters report.
UMC issued a statement confirming that the search took place, saying prosecutors were investigating the alleged personal investment in shares of ProMos by "a single individual associated with UMC." The company did not identify the individual.
Citing documents provided by the prosecutor's office, UMC said the investigation is not directed at the company and has no material influence on UMC's operation. UMC said it is fully cooperating with prosecutors and remains confident that the company's financial activities and investment decisions comply with applicable rules and regulations.
This is not the first time in recent years that a UMC chairman has drawn legal scrutiny. Former UMC Chairman Robert Tsao resigned in January 2006, just hours before being indicted in Taiwan for allegedly making illegal investments in a Chinese foundry. UMC vice chairman John Hsuan was also indicted and resigned his post.
Earlier this year, Frank Huang, chairman of Taiwan DRAM maker Powerchip Semiconductor Corp., was detained by prosecutors over alleged insider trading in Micronix International Co. Ltd. Huang was indicted last month and reportedly faces a possible four year jail term in addition to a fine.