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Executives indicted over iPod orders

updated 11:10 am EDT, Thu August 16, 2007

Execs indicted over iPod

Nine executives from the Taiwanese company Inventec Appliances have been indicted over insider stock trading relating to iPod orders, according to reports. The Banciao District Prosecutors Office has accused the executives, along with a lower-level worker, of deliberately withholding information on Apple's decision to reduce orders to Inventec, giving them time to sell $740 million NT of stock, equivalent to $22.4 million US. The prosecutors say that as early as January 19th of last year, executives knew iPod output would have to be cut by 49 percent as Apple directed orders to China.

Because of this, it is argued, plans for layoffs were made before it even announced the problems to investors the following March. Stock prices reached as high as $183.03 NT on February 3rd, but by March 24th, they had crashed to $106.54. Revenue had already begun to drop precipitously, falling from $12.3 billion NT in January to $6.95 billion the next month. The company has not recovered, and last reported revenue of $4.91 billion this July.

If convicted, the harshest penalties may be levelled against Chairman Jackson Chang and President Daniel Lee. Chang could be sentenced to a fine of $30 million NT and six-and-a-half years in prison, while Lee faces as much as seven-and-a-half years, plus a $60 million fine.




by MacNN Staff

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Comments

  1. testudo

    Joined: Dec 1969

    0

    Just more apple bashing

    Yep, seems that since Apple's now big (though $30 less big then two weeks ago), everybody's trying to find something to sue them over. Even if its indirectly.

    You know MS is probably behind this one!

  1. broohaha22

    Joined: Dec 1969

    0

    ridiculous

    testudo, you're a crazy, paranoid, fanboy apologist. This is marginally related to Apple, and no one is suing Apple in this article.

    An Apple supplier's execs withheld information about loss of sales to Apple so that they can dump their stock.



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