Execs face jail on back of iPod order cut

The success - and power - of Apple through its iPod family has led to serious charges in Taiwan

In a perfect example of the power of the mighty iPod, nine executives at a Taiwanese electronics company face jail time for insider trading. The root of their actions? Failing to reveal that Apple was slashing its orders for the firm to manufacture the player.

The execs at Inventec Appliances have been indicted in Taiwan on suspicions that, although they knew of Apple's intentions to halve its iPod order, they kept the information to themselves while they sold off company shares for their own gain.

Costly secrets

Apple told them in January 2006 that it would be cutting its order by 49 per cent and moving the lost production to China. Yet prosecutors claim that the information was not made public until mid-March.

In the intervening period, the accused sold around $22.4 million (£11.3 million) of Inventec shares. After full disclosure, the company's stock lost almost half its market value.

Inventec's chairman, Jackson Chang, and president, Daniel Lee, face a prison term of six and a half years and seven and a half years, respectively, as well as fines of up to £1 million. The company's monthly revenue has also been hit hard. It's currently bumping along at less than half of its peak before the Apple debacle.

J Mark Lytle was an International Editor for TechRadar, based out of Tokyo, who now works as a Script Editor, Consultant at NHK, the Japan Broadcasting Corporation. Writer, multi-platform journalist, all-round editorial and PR consultant with many years' experience as a professional writer, their bylines include CNN, Snap Media and IDG.