Local memory chipmaker Etron Technology Inc’s (鈺創科技) shares plunged to near the 7 percent daily limit yesterday after chairman Nicky Lu (盧超群) and his wife Liao Shu-chuan (廖淑娟), an Etron board member, were indicted for insider trading.
Etron shares fell 6.96 percent, or NT$1.95, to NT$26.05, on the GRETAI Securities Market, while the TAIEX gained 1.58 percent overall.
In a filing to the Taiwan Stock Exchange on Tuesday, the company said Lu and Liao had not received the indictment.
“The company’s operations remains stable and normal at the moment,” Hsinchu-based Etron said.
Taipei District Prosecutors’ Office spokesman Lin Chin-chun (林錦村) confirmed the indictment yesterday in a telephone call with the Taipei Times.
“Etron chairman Nicky Lu and his wife Liao were indicted on charges of illegally selling company shares early in 2006, using insider information,” he said.
A statement from the prosecutor’s office said Lu and Liao had sold a total of 3 million Etron shares between Feb. 27 and March 14, 2006 — at an average of between NT$43.78 and NT$46.87 — after learning that the company’s gross margin had plunged 50 percent in January 2006 from the previous December and that a fast rebound was unlikely.
The transactions were made before the company disclosed the financial results for the first quarter of 2006 on April 12, the prosecutors’ statement said.
The company said first quarter 2006 gross margin fell 45 percent to 14.19 percent from NT$26 percent in the fourth quarter of 2005, the prosecutor’s statement said.
Etron shares fell to an average of NT$37.7 in the 10 trading sessions after it posted its financial results, the statement said.
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