TAIPEI (Taiwan News) — BES Engineering Corp. (中華工程) filed a criminal complaint accusing attorney Lin Wen-peng (林文鵬) and three proxy solicitation firms of alleged insider trading and stock price manipulation following unusual share movements ahead of a takeover move on Tuesday.
The company said the complaint cites alleged violations of Article 157-1 of Taiwan’s Securities and Exchange Act (證券交易法), which prohibits insider trading, and Article 155, which addresses market manipulation.
BES identified Lin, a lawyer at Giant Era International Law Office (鉅業國際法律事務所), as a key subject of the filing.
Giant Era International Law Office is currently acting as legal counsel for PJ Group (寶佳集團) in the ongoing contest for control of BES. Lin also serves as an independent director of INA Energy (寶晶能源), an affiliate of PJ Group, and previously provided legal services to China Petrochemical Development Corp. (中石化), a BES-related company.
According to BES, Lin purchased several million BES shares before Nov. 4, when PJ Group formally disclosed its stake in BES and stated that the share purchases were for acquisition purposes. The company stated that Lin had not previously held shares and strongly suspects that the trades involved the use of non-public information and conflicts of interest, and has asked prosecutors to investigate the matter.
BES also named three proxy solicitation firms — Chang Lung Meeting Consultancy Co. (長龍), Lien Cheng Conference Consulting Co. (聯洲) and Chuan Tung Shareholder Service Co. (全通) — all of which had previously served as shareholder meeting consultants to the company.
According to market reports, PJ Group entered into arrangements with the three proxy solicitation firms in an effort to consolidate retail shareholder votes.
Against this backdrop, BES said it suspects that the firms may have obtained material non-public information through their service roles and accumulated BES shares while they were still under contract and receiving advisory fees. BES has asked authorities to review transaction records to determine whether improper gains were made.
Separately, BES said it identified newly opened shareholder accounts with sequential or closely numbered account identifiers during the same period. Such patterns may indicate coordinated account openings, the company said, and could warrant further review of trading activity, including possible cross trades or other forms of manipulation.
BES urged regulators, including the Taiwan Stock Exchange and the Financial Supervisory Commission, to examine brokerage data and fund flows. BES also cited that between Oct. 27 and Nov. 10, BES shares gained 55.16%. Trading volume on Oct. 29 was more than 13 times the daily average, and the stock was flagged repeatedly for unusual activity.
BES said it is continuing to review shareholder records and may file additional complaints if further evidence is identified. The company said it remains focused on corporate governance and protecting shareholder interests.