Taiwan News, Staff Writer
2013-10-03 12:11 PM
Prosecutors say that once the general background in the case was clear, Hsu was asked whether he was willing to admit he made mistakes and was reminded that if he pled guilty to the charges his sentence could be reduced. The prosecution now plans to proceed on the basis of Hsu’s testimony as a key to the rest of the case, As the investigation continues, the outside world will be watching to see whether Hsu will eventually ‘give up’ any other accomplices to his actions and whether he has won the enmity of entertainer Dee Hsu (Little S) and her husband Hsu Ya-chun with his testimony.
Prosecutors established early on that entertainer Dee Hsu's father, Hsu Ching-hsiang, widely known as the “Warren Buffett of Taiwan," was the sole manipulator behind Genome International’s acquisition of a stake in Top Pot Bakery.
In May this year Chiang Li-fen, a director of Genome International, moved to sell her personal holdings, leaving Hsu uneasy about conditions in the group. A quick check revealed several problem areas, with workers at Top Pot complaining about poor working conditions and the price of the stock ripe for a fall. Hsu suspected Chiang knew the stock was in for a fall and was looking to palm her holdings in the group off to him, putting him on the spot.
Investigation has disclosed that Genome International was once known as Himark Technology and had its shares barred from the market at one time for failure to make timely payment of earnings to shareholders. In 1995 Himark was re-named Asic IC Design Company, which was ‘then back-listed’ on the market in 2010 by Hsu Hsun-ping, founder of the Han-hsing Yi-mei Group.
The price of Asic shares reached its nadir at NT$1.99, when Hsu pumped in capital and renamed it Genome International. At that time Hsu Ching-hsiang held a 2.5% stake in the venture under the name of his son Hsu Ya-chun and watched as the share price climbed to NT$116 for a short while before slumping back down to half that level at NT$58 per share.
Meanwhile Hsu Hsun-ping and Hsu Ya-chun lived the good life, often seen dining and drinking together, and neighbors to celebrities who they encouraged to invest in Genome International.
Last year, Top Pot gradually made a name for itself in the baked goods market, with Dee Hsu as a faithful customer. Hsu Ching-hsiang’s connections to Genome International and Top Pot employees won him a meeting with Top Pot boss Chuang Hung-ming to talk about the company and its potential. Hsu Ching-hsiang said that he wanted to take Top Pot public and signed up an accounting firm to handle the details, eventually buying a 60% share of the bakery under Genome International’s name.
In April Genome International paid out US$1.2 million to acquire the trademark from Top Pot, which at the time was capitalized at only US$1.3 million. Genome International paid out US$15 million to acquire a 50 percent stake in Top Pot, setting the bakery up as one of its subsidiary companies.
Meanwhile strong marketing and an endorsement campaign by Little S brought encouraging results, with nearly a dozen outlets in Taiwan, mainland China and Hong Kong bringing in an annual turnover estimated at more than US$500 million. Genome International saw its shares triple from last year’s NT$58.2 to NT$212 before another disastrous fall back to NT$60 per share recently.
In May this year Hsu Hsun-ping and his wife Chiang Li-fen unloaded their personal holdings on Hsu Ching-hsiang, who soon found Top Pot’s performance foundering and moved quickly to sell off his holdings in the company.
In July Chiang Li-fen is alleged to have sold off her holdings in Genome International in the knowledge that problems with Top Pot would adversely affect the group’s stock prices, a violation of regulations against insider trading because of her position on the group’s board,
Prosecutors have found that a number of individuals with large holdings in Genome International also dumped much of their stock between May and July, and their next step will be to determine who else had inside knowledge of the group’s troubles and moved to dump their shares.