The chairman of Taiwan's United Microelectronics Corp announced on Thursday he would quit over a regulatory probe into the sale of shares by executives.
"I plan to offer my resignation again at a board meeting in March next year and will not agree to stay on," Chairman Robert Tsao said according to a statement issued by the world's second-largest contract chip maker on Thursday.
"After my resignation statement, I hope all criticism and actions against (UMC) will direct at me, rather than aiming at the company, my colleagues and innocent shareholders."
Chief Executive Officer Jackson Hu will take over as chairman, the statement said.
The Taiwan Stock Exchange and regulators are reviewing stock sales by executives that followed a request from US authorities to restate past earnings.
The probes have been followed by a fine for the firm for inadequate disclosure of information to shareholders, and by a threat by UMC to delist from Taiwan's exchange.
Thursday's statement came after the market closed. UMC shares fell nearly 4 percent earlier in the day, compounding a 3 percent slide on Wednesday, but later reversed course in late trading to close up 0.27 percent at T$18.9 as the main TAIEX index rallied to close at a 20-month high.
The exchange and the Financial Supervisory Commission (FSC) said they had learned that some UMC executives had sold company shares after receiving a notice from US regulators to restate UMC's earnings earlier this month.
UMC has since restated its 2002 to 2004 earnings because of an error in calculating goodwill impairment, deepening its 2004 net loss by T$9.5 billion ($287.1 million).
The Taiwan Stock Exchange fined UMC T$50,000 ($1,511) for not making the announcement promptly to investors in Taiwan.
UMC said it was not required to do so under Taiwan accounting rules.
"We are reviewing relevant information," Su Song-chiu, the stock exchange's senior executive vice president, told Reuters.
"(We) did not say it involved insider trading, but the point is their executives did report share transfers during that period," Su said.
Tsao, who called the government inquiry over share sales of UMC executives "complete nonsense", denied any wrongdoing and urged the FSC to stop the investigation.
Analysts saw the resignation as attempt by the company to bring the dispute to an end.
"Since Robert Tsao has offered to quit as chairman, my feeling is, the company is taking a step back and hopes the whole thing will draw to a close," said Chen Li-way, an analyst at Polaris Securities.
"Therefore, any future unhappiness between Robert Tsao and the government will not involve UMC," Chen said.
Tsao earlier questioned whether Taiwan has become "a nation of chaos", prompting the island's top financial regulatory agency to issue a strongly worded reply.
"We had discovered some executives of the company sold shares ... during the sensitive time, which was clearly inconsistent with the company's statement," the FSC said.
As a result of the earnings restatement UMC's profit for 2003 was trimmed to T$10.48 billion from T$12.33 billion, and the 2002 results were revised to a T$222 million loss from a T$294 million profit.
UMC said certain investments and liabilities had been calculated by book value rather than market value, resulting in an understatement of the goodwill impairment charge under US accounting rules.
The share sale row is not the first dispute between UMC and authorities.
The company is being investigated over allegations that its involvement with Shanghai-based HeJian Technology Co Ltd broke restrictions on investment in China. Tsao was also fined for late disclosure of his firm's involvement with HeJian.
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