Venture capital mogul begins prison sentence
CNA Wednesday, January 13, 2016, 12:03 am TWN
TAIPEI -- Ko Wen-chang (柯文昌), chairman of WK Technology Fund (普訊創投), began serving a nine-year prison sentence for insider trading Tuesday.
He was taken to Taipei Prison in Taoyuan, northern Taiwan, after reporting to the Taipei District Prosecutors Office.
In a statement issued Tuesday, Ko said he never engaged in insider trading and he expressed gratitude for the support of the business sector and his friends.
He said he still has faith in judicial system and believes his name can be cleared through relief proceedings.
Before his departure for the prison, he called on his staff "get down to good work" and "stay until I get out."
The Supreme Court on Dec. 18 rejected an appeal by Ko, known as the godfather of venture capital in Taiwan, and upheld a nine-year sentence and a NT$100 million (around US$3 million) fine against him for insider trading.
The nine-year sentence was the heaviest ever meted out in Taiwan for an insider trading conviction.
In 2006, Ko then a director of Green Point Enterprise Co., learned that Jabil Circuit of the United States had issued a non-binding letter of intent to buy Green Point Enterprise Co. and he invested heavily in the company's shares over several sessions, according to the court ruling.
That knowledge constituted insider knowledge not available to regular investors, and Ko ended up making illicit gains of NT$470 million from the stock trades, the court said.
One month before the acquisition, the price of Green Point shares showed an abnormal increase, and several WK Technology Fund subsidiaries continued to buy Green Point stocks, the court said.
The situation came to the attention of the Financial Supervisory Commission (金管會), which turned it over to prosecutors for investigation.
The business sector, however, opposed the decision, and four business leaders called a joint news conference on Dec. 21 to express support for Ko.
The four were Acer Group (宏碁集團) founder Stan Shih (施振榮), Delta Electronics (台達電) founder Bruce Cheng (鄭崇華), Cathay Financial Holding (國泰金) Chairman Tsai Hung-tu (蔡宏圖) and Pegatron Corp. (和碩) Chairman T.H. Tung (童子賢).
They contended that the court was wrong to use the timing of the non-binding letter of intent to determine when the insider trading began, and that the ruling was contradictory to international merger and acquisition laws.
They argued that a non-binding letter of intent does not guarantee that an investment will actually take place.
The business sector said Ko, once the chairman of Hewlett Packard Taiwan, has contributed a lot to Taiwan's high-tech sector, and the verdict would deal a serious blow to confidence in the private sector.
MOST POPULAR OF THIS SECTION