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Acer offices raided in insider trading probe
Publication Date : 19-03-2014
The New Taipei District Prosecutors Office (NTDPO) yesterday dispatched prosecutors and investigators to probe 14 separate locations belonging to Taiwanese personal computer manufacturer Acer Inc. after allegations of insider trading.
According to the NTDPO, managers charged with the company's funds and bond trading had received instructions from the Acer management that the company would be posting a net loss of NT$13.12 billion )US$431 million) in the third quarter last year, and had managed to sell its shares in an attempt to reduce the loss. All this took place before former Acer chief executive and chairman J.T. Wang resigned to take responsibility over the net loss.
After searching the 14 venues, including the Acer headquarters in Xizhi, 10 defendants were summoned for interrogation by the NTDPO. Among the 10 were Acer's spokesman Henry Wang and several fund managers.
The search was slated to be carried out last Friday, but prosecutors had postponed the plan after the news was allegedly leaked to Acer officials. After the shares closed yesterday afternoon, the search was carried out and the NTDPO announced that the defendants will be re-interrogated today.
The company confirmed reports of the search, and noted that two of its employees were reportedly involved in insider trading, and that Acer will do its best in cooperating with the investigation. The confirmation was posted on the Market Observation Post System last night, stating Acer hoped the investigation would reveal the truth.
Acer also stressed that the company has always been law-abiding and operated fairly, and that its employees are asked to do the same as well.
Wang's resignation in 2014
Wang's resignation as CEO was effective starting Jan 1, 2014, and his term as chairman is slated to end in June 2014, the company said. He will be replaced by company President Jim Wong.
In a statement released prior to Wang's resignation, the company attributed its dismal third-quarter operating loss to the gross margin impact of gearing up for new products and related inventory management, as well as the listing of the class action suit settlement compensations paid by its affiliated eMachines company.
Acer said there was also an intangible asset impairment loss, which includes trademarks and good will, of NT$9.94 billion (US$326 million). The company's partnership with Gateway, Packard Bell and Founder Group contributed to the majority of the impairment loss.
According to a company statement, Wang said that he feels sorry for not being able to lead Acer back to prosperity in the past few years when the company has faced many complicated and harsh challenges.
“As Acer sees consecutive poor financial results, it is time for me to take responsibility,” Wang was quoted by the statement as saying.