Four charged with insider trading in investigation of Top Pot Bakery
By Queena Yen, The China Post
January 29, 2014, 12:08 am TWN
TAIPEI, Taiwan -- The Taipei District Prosecutors' Office (TDPO) concluded its investigation over the case of Top Pot Bakery, which involved alleged deceptive advertising and insider trading, and indicted four people including Mike Hsu (許雅鈞), the husband of famous talk show host Dee Hsu (徐熙娣), yesterday.
According to the TDPO, Mike Hsu denied the insider trading charges, saying that he sold the stock as an investor and he did not receive inside information in advance. However, the other three defendants confessed that there was a contact group among all the shareholders as well as operators of the company, and had illegally distributed confidential information for the purposes of stock trades.
Prosecutors pointed out that the defendants are being charged over violations of the Securities and Exchange Act and suggested the court hand out severe punishments to Mike Hsu since he denies involvement in any illegal activity. Hsu, if found guilty, could face a three- to 10-year prison sentence.
As for the other defendants — Hsu Ching-hsiang (許慶祥), father of Mike Hsu, Hsu Hsun-ping (徐洵平), the president of the bakery, and his wife Jiang Li-fen (姜麗芬) — prosecutors suggested a prison sentence starting at one and half years given the nature of their confessions. The three defendants may also have a chance to get deferred prosecution, according to prosecutors.
The case of Top Pot Bakery started with allegations of artificial essences being added into the famous bakery's products, despite its claims of all-natural flavor. As for the deceptive advertising, prosecutors punished the company with a fine of NT$180,000 and continued their investigation of alleged fraudulent activities. While investigating the deceptive advertising case, prosecutors found evidence suggesting that insider trading had taken place.
The TDPO emphasized that they will keep looking into the case to see if the company is speculating in the stock for others.
Founder Gets Deferred Prosecution
Chuang Hung-ming (莊鴻銘), the founder of Top Pot Bakery, received a deferred prosecution over the charge of fraud and earning illegal profits under the condition that he provide 5,000 units of bread to disadvantaged groups and pay a fine of NT$1 million, according to prosecutors.
Prosecutors pointed out that Chuang had actively cooperated with the investigation and explained the formula of each product in details in the case of artificial essences. In addition, Chuang also provided information about the management of the company. What Chuang did was helpful in clarifying the case, said prosecutors.
Also, Chuang supported the TDPO in its investigation of the insider trading case by providing important information. Therefore, prosecutors say Chung had a good attitude and showed remorse over his actions.
Top Pot Bakery had offered a refund program and gave refunds to its customers from Oct. 1 to Nov. 30 last year after the artificial essence scandal was reported.
According to prosecutors, the bakery received 168,637 customer refunds and paid about NT$119 million in the case. Therefore, prosecutors think that the company already learned its lesson, leading to the decision to defer the prosecution of Chuang.