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Four indicted in Top Pot insider trading scheme
Taiwan News, Staff Writer
2014-01-28 03:23 PM
The Taipei Prosecutors Office announced Tuesday that it is indicting four suspects on charges of insider trading of shares of Genome International, the parent company of Top Pot bakery. Charged in the case are Hsu Ya-chun and Hsu Ching-hsiang, husband and father respectively of entertainer Dee Hsu (Little S) and Genome Chairman Hsu Hsun-ping and his wife Chiang Li-fen. Prosecutors also said that action against Chuang Hung-ming, the previous owner and president of Top Pot, would be deferred.

Prosecutors noted that Top Pot expanded rapidly on the back of claims that its bakery products were 100% natural, but was later found to be using a variety of artificial flavors and deliberately using false advertising to bolster the brand’s reputation. The bakery was fined NT$180,000 and prosecutors launched a further investigation into accusations of fraud in August last year.

Prosecutors said Chuang Hung-ming has been cooperative and admitted to his crimes. Chuang helped to arrange a system for returns and refunds following disclosure of the firm’s illegal activities. Between October 1 and November 30 last year the company offered refunds totaling NT$101.9 million to 168,637 consumers, putting a big dent in the company’s operating income of NT$126.2 million for the period from May 2012 to the end of last year.

In addition, said prosecutors, Chuang assisted in the investigation process by providing information including various bread recipes and production methods and how natural yeast and artificial flavorings were used. He also verified certain details regarding various operations in the company, helping to speed handling of the case.

Prosecutors indicted the above four individuals on charges of insider trading in violation of the Securities Exchange Act, noting that Hsu Hsun-ping and his wife had dumped shares in Genome after receiving inside information in order to avoid NT$12.32 million in losses. Hsu Ching-hsiang and Hsu Ya-chun stand accused of trying to avoid losses of NT$6.57 million and NT$13.01 million respectively. The former three defendants have admitted guilt and said they are willing to repay the proceeds, and prosecutors have reduced their recommended sentences accordingly. Hsu Ya-chun is the only one of the four to maintain he is innocent of the charges. Prosecutors say he was a major participant in the crime and have asked the judge to consider a heavier sentence for him due to his failure to cooperate in their investigation.

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