| Summary: | 碩士 === 國立臺灣科技大學 === 財務金融研究所 === 100 === Causing the turbulence in Taiwan capital market and technology industry, in 2005, the Hsinchu District Prosecutor's Office conducted the investigation alleging UMC’s violations of ROC securities laws and a breach of fiduciary duty in connection with the involvement in the operation of HeJian Technology Co., Ltd., a semiconductor manufacturer in Suzhou, China. Both the Chairman and Vice Chairman of UMC have been named as defendants by the prosecutor. The allegation made by the prosecutor is that the defendants collectively moved UMC’s funds, technology, equipment, customers’ orders and labor resources to HeJian without regulatory approval. The prosecutor also asserted that the UMC management has acted against its shareholders’ interest by offering free support and technology assistance to HeJian without fair return or consideration to UMC. Both UMC and its Chairman were fined by ROC Financial Supervisory Commission and Taiwan Stock Exchange Commission for delay in making public disclosure regarding the information relating to HeJian. The case was later dismissed by the court and one proposed fines was also revoked as the result of the plea of not guilty.
This paper discusses the relationship between corporate governance, financial disclosure and the transparency of material information. The investigation and prosecution processes and the judgment reached by the court related to the above case will be explored, with references to the correspondences and regulations related to business law, financial accounting rules, the Securities Exchange regulations and other related theories and writings. The paper will also discuss the adverse effects associated with the lack or deficiency of prosecutors’ general business experience when undertaking the investigation of the UMC/HeJian case. In this paper, other roles that a financial professional may undertake, including establishment of communication channels or expert testimony services to bridge the gap between legal and accounting professionals will also be reviewed.
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