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Stocks

Executive at Apple supplier ASE indicted on insider trading

Tien Wu broke rules during chip assembler's attempt to take over rival SPIL

ASE Chief Operating Officer Tien Wu has been indicted on insider trading charges.

TAIPEI -- A top executive of key Apple supplier Advanced Semiconductor Engineering, also the world's largest chip assembler by revenue and market share, has been indicted on charges of insider trading, a Taiwanese prosecutor said on Friday.

A spokesman for the Kaohsiung District Prosecutors' office, Wang Chi-ming, told the Nikkei Asian Review that ASE Chief Operating Officer Tien Wu had instructed his family and friends to buy shares in both his own company and its smaller rival Siliconware Precision Industries shortly before the former announced an unsolicited tender offer for the latter in the second half of 2015.

"Wu asked his friends and relatives to buy shares of both ASE and SPIL before the information [about the takeover offer] was released to the public, and that move breached the securities trading regulations," the prosecutor said.

The authorities have seized suspected profits, which total some 9 million New Taiwan dollars ($298,000), according to the prosecutors' office.

ASE also confirmed Wu's indictment in a stock exchange filing on Friday and said the company would cooperate with local prosecutors in investigations.

"The company's operations are unaffected and our future plans and execution will not be affected by Wu's case," ASE said.

ASE assembles chips for the Apple Watch, as well as the U.S. company's 3-D force touch chips, and Wi-Fi chips for iPhones. It is also a supplier to global chipmakers including Qualcomm, Broadcom, MediaTek, NXP and Bosch.

ASE and SPIL eventually agreed on a buyout offer in May 2016 after a protracted hostile takeover attempt by the former.

They formed a new holding company to control both entities, with a combined market capitalization of NT$486.68 billion.

However, the deal has yet to be approved by Chinese regulators. It has been approved by antitrust watchdogs in the U.S., South Korea and Taiwan.

Based in the southern Taiwanese city of Kaohsiung, ASE was founded by Shanghai-born entrepreneur Jason Chang in 1984. Chang now makes rare public appearances, and Wu acts as the company's public face.

Shares of ASE closed unchanged on Friday at NT$40 while SPIL's shares fell 0.21% to close at NT$48.6.

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