NEWS > Taiwan/HK
Taiwan court indicts chip executives for aiding mainland firm
2006-01-09 03:27:57 CRIENGLISH

TAIPEI, Jan 9 (AP) -- Top executives of a leading Taiwanese chipmaker were indicted on Monday for illegally offering technology and other assistance to a mainland Chinese company, a court official said.

After months of investigation, prosecutors filed charges of breach of trust against Robert Tsao and John Hsuan, chairman and vice chairman of United Microelectronics Corp. They were accused of aiding He Jian Technology, a chipmaker former UMC employees established in China in 2001.

"We have found evidence that UMC has offered He Jian Technology management and personnel assistance, and has referred some orders to He Jian," said Tsai Tian-yuan, spokesman for the prosecutors office in Hsinchu, a northern city where the company is based.

Taipei strictly controls chipmakers' investments in mainland China, with companies required to apply for permission before going ahead with such deals. Taiwan and China split amid civil war in 1949, and Taiwan fears its state-of-the-art technologies could benefit its rival.

Alex Hinnawi, a UMC spokesman, said he couldn't comment on the charges, which came on the same day UMC's board approved the resignations of both Tsao and Hsuan, and said they would become honorary chairman and honorary vice chairman, respectively.

Sandy Yen, another UMC spokesman, said the charges "won't have any impact on the company's operations."

Tsao and Hsuan weren't immediately available to comment.

UMC is the world's second-largest producer of made-to-order chips, after another Taiwanese contract chipmaker, Taiwan Semiconductor Manufacturing Co.

Also indicted of breaching trust was Tzeng Tun-chian, president of a venture capital firm wholly owned by UMC, Tsai said.

Tsao has denied any illegal links with He Jian, but said the two companies would consider merging once Taiwan lifts restrictions on investments.

UMC executives have accused Taiwan's independence-leaning leaders of ordering the probe against them to discourage large-scale Taiwanese investment in China. Such investment now amounts to an estimated US$100 billion (€80 billion).

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