Taiwanese Firm's Executive Daughter, Others Indicted in Insider Trading Case Over Fab Sale

In Taiwan, 14 individuals, including the daughter of Lite-On Technology's chairman, have been indicted on charges of insider trading concerning the sale of the company's plant in the Southern Taiwan Science Park (STSP) to TSMC. The case centers on allegations that privileged information about the sale was leaked and used for illicit stock market gains.

The STSP plant was initially slated for public auction in 2020 with a reserve price of NT$4.05 billion. However, the auction process was repeatedly delayed due to the COVID-19 pandemic. Ultimately, TSMC negotiated a deal to acquire the plant for NT$3.65 billion, a significant development that was publicly announced on August 12, 2020.

Prosecutors allege that Chairman Jaw Ji-rong discussed the plant sale with his son, Jaw Hui-sheng, during a regular family gathering. This conversation was reportedly overheard by Jaw Hui-yi, the chairman's daughter, and her sister-in-law, Lin Wei-chi. Subsequently, Jaw Hui-yi purchased 93 shares of Lite-On stock on August 11, the day before the official announcement. Lin Wei-chi allegedly shared the information with her father and brother, who collectively purchased hundreds of shares.

Further complicating the case, Ma Jen-chiang, a manager in Lite-On's general affairs department, who was involved in the plant's relocation preparations, also allegedly purchased stocks in advance. He is accused of informing his brother-in-law and other colleagues, who also profited from the pre-announcement stock purchases. Employees involved in the relocation and quality assurance departments, along with an independent director's spouse, are also implicated.

While Chairman Jaw Ji-rong and his son were not indicted due to insufficient evidence directly linking them to the illegal tipping, the prosecution has moved forward with charges against the 14 individuals for violating Taiwan's Securities Transaction Act. Some of the indicted individuals have reportedly returned illicit gains totaling over NT$1.06 million, a factor that may be considered for sentence reduction.