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A inside information investigation into a Taiwanese vaccine manufacturer Covid-19 has raised wider concerns about financial oversight in the country and has entangled President Tsai-ing Wen’s administration.
Taipei-based Shilin District Prosecutor’s Office told the Financial Times that it is investigating Medigen Vaccine Biologics Corporation after the company’s shares jumped more than 20% in the days leading up to the announcement of positive results for phase-in clinical trials. 2 of his vaccine. The prosecutor declined to provide further details about the investigation.
Last month, Tsai delivered a televised speech in which he rejected allegations by political opponents that his government had blocked vaccine imports to raise the price of Medigen shares.
The investigation opens another front through which Tsai’s political rivals can attack the president as he tries to defend China’s external pressure.
Only 8.2% of Taiwan’s population has received its first punch and the government has agreed to buy 5 million vaccines from Medigen to try to address the shortage that Taipei has partially blamed on China. blocking foreign-made dose purchases.
“We have done an internal investigation and there is no evidence to specify the government or its employees [on] shares, “Tsai said during his speech. Later, Taiwan’s finance ministry said none of the eight government-backed banks had bought Medigen shares before the sudden jump.
Tsai has urged citizens to be wary of false news about the vaccination campaign, which yes proliferated in the Taiwanese media as the country entered a soft blockade due to a domestic outbreak in early May.
But research has revealed the prevalence of stock manipulation in Taiwan, where financial regulators often do not have the legal authority to crack it down. “The Medigen case is very political,” said Wang Wen-Yeu, a professor of capital markets law at Taiwan National University. “But the practice of insider trading is overflowing in Taiwan.”
Wang pointed to a high-profile case involving Ko Wen-chang, former president of Hewlett-Packard Taiwan. Ko was sentenced in 2015 to nine years in prison after buying shares in a Taiwanese company that he knew would be acquired by a larger American group.
Lin Shu-Yu, CLSA brokerage analyst, added that “everyone in the financial industry knows that privileged trading and securities manipulation are a problem.” He said it is common for small listed companies to require employees, financial intermediaries and journalists to buy shares with brokerage accounts of family and friends before positive financial results are published.
“The public does not have much confidence in the government’s ability to control this sector,” Lin added.
Part of the problem also stems from the fact that the Taiwan Financial Supervision Commission has no jurisdiction over insider cases, lawyers argue.
Instead, the cases correspond to local prosecutors “who do not have the financial background to prosecute successfully,” Wang said.
Wu Huan-Ting, a California-based lawyer for Nolan Barton and Elms, notes that the percentage of convictions for insider trading is less than 40%.
Officials argue that Taiwan’s approach simply requires a higher burden of proof.
“There are some issues with privileged trade in Taiwan, but I don’t think it’s particularly serious compared to other countries,” said Cindy Chang, president of the government’s Center for Securities and Futures Investor Protection.
Some highlight the contrast between Taiwan’s financial industry and its cutting-edge technology companies, which dominate semiconductors.
“Taiwan’s financial markets have a lot to go through,” said Wang, the law professor. “They are lagging behind in the high-tech sector; it has to do with lack of discipline.”
Medigen did not respond to any requests for comment.
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