Prosecutors investigate insider trading of Taiwan Development

Prosecutors took the initiative to investigate the case after it was exposed two days ago by Lawmaker Chiu-yi of the opposition Kuomintang.

Chiu said that Chao’s mother Chien Shui-mien conducted massive purchases of the shares of Taiwan Development and Trust, then a delisted firm, at a unit price of NT$2 in June and July 2005.

After the firm was re-listed on the local bourse on March 1 this year, its share price shot up all the way to NT$17.65 Thursday, allowing Chao’s mother to make windfall profits of over NT$70 million, according to Chiu.

“If without insider information, who will dare to spend over NT$10 million to buy delisted shares,” Chiu asked at a recent press conference.

In response, Taipei prosecutors visited Taiwan Development and Trust, the Taiwan Stock Exchange Corp. and relevant securities brokerage houses to collect trading data between 2004 and 2005.

In addition, prosecutors yesterday also questioned some investors who purchased over 100,000 shares of Taiwan Development and Trust at a unit price of NT$2.

The prosecutors will also move to check whether Chao’s mother was engaged in the alleged insider trading or use of surrogate trading accounts.

Meanwhile, Lawmaker Chiu yesterday continued to unveil that Chien is now among major shareholders of Taiwan Development and Trust, with a holding of 500,000 shares. “As an elementary school teacher not familiar with stock market investment, Chien dared to invest NT$10 million to purchase 500,000 shares of a delisted firm. Why? If she is not mad, there must be insider trading involved,” Chiu stressed.

Meanwhile, lawmakers of the ruling Democratic Progressive Party yesterday called for Chao’s mother to donate all her investment gains, just as done by Chao’s mother-in-law, Wu Shu-chen, wife of President Chen.

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