August 14, 2007 – Taiwanese prosecutors are pushing for jail time for former UMC chairman Robert Tsao for his company’s alleged illegal technology involvement with a Chinese partner, even though a lower court recently threw out fines levied against him, according to local media reports in Taiwan.

The Hsinchu District Court has held a final hearing on charges that Tsao helped UMC invest in China’s He Jian Technology Co. in Suzhou, including providing technical know-how, in Nov. 2001 without official government approval. Prosecutors reportedly are seeking a 22-mos. jail term for former vice-chairman John Hsuan, and 14 mos. for Cheng Tun-chien, head of UMC-affiliate venture capital firm Fortune Venture Capital Corp. A final verdict isn’t expected until late October.

On July 19, the Taipei Administrative High Court invalidated a US ~$150,000 fine imposed on UMC in Feb. 2006, saying that UMC’s investment in He Jian can’t be classified as an investment since UMC only provided technical assistance, and that the government failed to sufficiently prove otherwise. Top UMC execs also were targeted >and eventually stepped down amid the controversy.

The Taiwan Economic News reports that prosecutors are trying to draw distinctions between the ruling last month and its appeal, claiming that an internal UMC document indicates Tsao and Hsuan intentionally committed “breach of trust” by offering UMC’s assets without charge — a different accusation that what the Ministry of Economic Affairs cited in its fines of the execs. The Taipei Times and Digitimes also reported on the new charges.