AU Optronics Management Indicted
Taiwan based AU Optronics (2409.TT) saw two of its senior level managers and a partner indicted for a scam that cost the company $86.6m over a period of seven years. The manager permitted the third party to buy LCD panels from the company at a price lower than normal, which he resold in China for a profit and then laundered a portion of the profit back to the manager through accounts of relatives, eventually using the illegal profits to buy real estate. The partner generated $3.4m in profits while the manager admitted to and returned ~$360,000, with the second manager, who joined the scheme later, taking in ~$220,000 in kickbacks and other income. The initial manager was detained, with the court fearing he might destroy evidence, while the other two were released on ~$72,000 bail each.
While price fixing was the more typical issue for panel companies in the early 2000’s, with AUO and a number of other panel producers being indicted and fined for collaborating to keep panel prices from declining over a period of four years, such lesser infractions seem to plague many panel producers who have trouble maintaining a watchful eye over managers, and plead to the courts how shameful these crimes are but take little responsibility for the lack of oversight. We would expect a company panel to be formed to examine ways in which these crimes could be prevented in the future, and a few new programs to make sure it does not occur again in the near future, as always.
While price fixing was the more typical issue for panel companies in the early 2000’s, with AUO and a number of other panel producers being indicted and fined for collaborating to keep panel prices from declining over a period of four years, such lesser infractions seem to plague many panel producers who have trouble maintaining a watchful eye over managers, and plead to the courts how shameful these crimes are but take little responsibility for the lack of oversight. We would expect a company panel to be formed to examine ways in which these crimes could be prevented in the future, and a few new programs to make sure it does not occur again in the near future, as always.
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