UMC expects exoneration in probe

Taiwan's investigation into United Microelectronics Corp (UMC), the world's second-largest contract chipmaker, is nearing its conclusion, UMC chairman Robert Tsao told reporters on Saturday.

Mr Tsao expressed confidence that the probe would exonerate the firm, which prosecutors believe unlawfully transferred technology and investment capital into Suzhou-based He Jian Technology.

'We never hid anything, this is just a simple relationship with a friendly company,' Mr Tsao said.

Taiwan's Financial Supervisory Commission (FSC) had failed to uncover any evidence of illegal activity by his company or its executives, Mr Tsao said.

In February, municipal prosecutors raided UMC headquarters in Hsinchu City and the homes of several top UMC executives, seizing hundreds of documents and computers as evidence. Last month, the FSC slapped Mr Tsao with a NT$3 million ($742,500) fine for failing to disclose board decisions regarding He Jian to shareholders.

He Jian chairman Hsu Chien-hwa, a Taiwanese national detained during the February raids and later released on NT$10 million bail, remains barred from leaving Taiwan.

Taiwanese investment into hi-tech industries in the mainland is illegal without prior approval from Taipei, which carefully controls any technology with potential military applications.

'We are a large listed firm with an excellent legal team that has fully researched these matters,' Mr Tsao said. 'We certainly would not have broken any laws.'

Taiwanese investigators confirmed on Saturday that the probe was drawing to a close but said they had yet to conduct a final interview with Mr Tsao. An FSC spokesman said Mr Tsao had declined to meet them last week and they were seeking an interview next month.

He Jian was set up by former UMC employees in 2001. In 2002, the Taiwanese government permitted direct investment into the mainland semiconductor industry for the first time.

In a letter to shareholders published in March, UMC said He Jian had consented to give it a 15 per cent stake in light of its previous assistance, which could render the investment legal under Taiwanese laws. Mr Tsao said the government had so far failed to respond to his queries about the proposed equity transfer.