Five of the most senior executives at consumer electronics manufacturer BenQ have been charged with financial crimes.
Those indicted by prosecutors in Taiwan include the company's chairman and chief executive, and its president.
BenQ announced that it was "shocked and baffled" by the charges, and that they were "not acceptable", according to local media.
BenQ chairman and chief executive K Y Lee, and president Sheaffer Lee (no relation), who were indicted yesterday, had already been questioned by prosecutors last month.
The firm's chief financial officer, Eric Yu, who was also charged, is already in detention. Two other executives were also indicted.
The charges appear closely linked to BenQ's disastrous investment in Siemens' mobile handset division, which cost the Taiwanese manufacturer more than $1bn in losses in little more than a year.
The charges include insider trading and money laundering. The prosecutors outlined an alleged scam in which BenQ employees sold millions of dollars worth of shares and transferred the funds raised to a small Malaysian company, CREO Ventures.
These funds were later reinvested in BenQ shares after the price fell following news of problems with the Siemens Mobile acquisition, the prosecutors allege.
BenQ has denied the allegations, claiming that the Malaysian company was in fact part of a legitimate accounting scheme to help employees sell their share bonuses.
The former Siemens mobile division eventually went bankrupt. Since then, BenQ has begun selling hundreds of millions of dollars in shareholdings to strengthen its financial condition, which was severely damaged by the mobile unit problems.
Most recently the company sold US$140m worth of shares in leading LCD maker AU Optronics which, like BenQ, is a company spun off from Taiwan's giant Acer Group.
Former Acer Group firms usually remain loosely affiliated, connected by share cross holdings and links between senior executives.
BenQ executives charged with money laundering
By
Simon Burns
on May 10, 2007 3:01PM
Company 'shocked' as chairman and president face serious charges.
