One of the most notorious stock manipulation scandals in Taiwan’s history, the Tatung Co. stock case, appeared to reach a final resolution in early 2024 when the Supreme Court finalized a 13.5-year prison sentence for the main culprit, Zheng Wen-yi. Zheng began serving his term in July 2024. However, in June 2026, this settled financial crime was suddenly pushed back into the media spotlight. Three Control Yuan members—Kao Yung-cheng, Lin Yu-jung, and Yeh Yi-chin—released an investigation report asserting that the trial contained “procedural flaws” and demanding that the judiciary review and “rehabilitate” Zheng’s case.
What exactly was the Tatung stock manipulation case? How did Zheng manipulate the market, and why has the Control Yuan’s intervention triggered such fierce public outrage?
1. Eyeballing Corporate Control: Colluding with Mainland Chinese Capital
Tatung Co., an iconic Taiwanese electrical appliance and heavy machinery manufacturer, owns vast amounts of valuable land assets across Taiwan, making it a frequent target of corporate control battles between company insiders and outside market factions.
In May 2016, Zheng Wen-yi, a prominent Taiwanese businessman operating across the Taiwan Strait, recognized that the upcoming Tatung board election in 2027 would present a lucrative opportunity to seize control of the company. Lacking sufficient capital on his own, Zheng colluded with Ren Guoqiang, chairman of the mainland China-based developer Long Feng Group, to secure billions of New Taiwan Dollars in funding.
Zheng utilized corporate accounts he controlled, alongside dozens of dummy accounts provided by his secretary, relatives, and mainland Chinese partners, to quietly begin acquiring large quantities of Tatung stock.
2. Anatomy of the Scheme: Wash Trading and Price Inflatement
According to court verdicts, the group employed classic and highly illicit market manipulation tactics:
- Continuous Buying at High Prices: Between September 2016 and March 2017, Zheng’s group continuously placed buy orders at prices higher than the prevailing market price using multiple dummy accounts to artificially push up Tatung’s stock price.
- Wash Trading (Self-Dealing): The group frequently conducted wash trades—buying and selling Tatung stock between their own accounts at identical prices and times. This created a false illusion of high trading volume and intense market demand, enticing unsuspecting retail investors to follow suit.
- Price Skyrocketing: Under this artificial demand, Tatung’s stock price surged from approximately NT$5.48 per share to a peak of NT$20.65 per share, an increase of nearly 300%.
- Dumping and Profit-Taking: Once the price peaked, Zheng’s group dumped their shares on the market. Excluding the mainland Chinese funds subsequently frozen by regulators, Zheng personally pocketed over NT$1.114 billion in illicit profits.
The scheme severely disrupted Taiwan’s financial market order and inflicted massive losses on retail investors who bought into the artificially inflated stock.
3. The Judicial Process: 13.5-Year Sentence Upheld
Following investigations, the Taipei District Prosecutors Office indicted Zheng in 2018 for violating the Securities and Exchange Act.
- First-Instance Verdict (August 2020): The Taipei District Court sentenced Zheng to 13.5 years in prison, citing the severity of the market manipulation and his complete lack of remorse.
- Second-Instance Verdict (2023): The Taiwan High Court upheld the sentence, ruling that Zheng’s collusion with foreign capital to manipulate a domestic company’s stock severely undermined the integrity of the market.
- Final Verdict (2024): The Supreme Court dismissed Zheng’s final appeal, making the 13.5-year sentence definitive. Zheng entered prison in July 2024.
4. The 2026 Control Yuan Scandal: Public Power Serving Elite Interests?
The case took a controversial turn on June 12, 2026, when Control Yuan members Kao Yung-cheng, Lin Yu-jung (who has a pro-green and Tsai faction background), and Yeh Yi-chin—all appointed by former President Tsai Ing-wen—held a press conference to call for Zheng’s “rehabilitation.” They claimed that the Supreme Court failed to apply new laws regarding “expert witnesses,” which allegedly infringed upon the defendant’s rights.
However, the report was immediately met with fierce condemnation from the legal community and the public due to glaring conflicts of interest:
- Expert Advisors Were Defendant’s Representatives: The three “independent experts” consulted for the report were Chen Shi-chung (a retired Supreme Court Chief Judge who was previously implicated in the Weng Mao-chung bribery scandal and is Zheng’s defense attorney), Wu Can (former President of the Supreme Court whose son, Wu Meng-hsun, is Zheng’s defense lawyer), and Professor Liu Lien-yu (who had been hired directly by Zheng during the trial to write an opinion defending him).
- Control Yuan Investigator Shared Board Membership with Zheng’s Lawyer: Investigator Kao Yung-cheng serves as a board member of the “Judicial Glimmer Foundation,” whose chairman, Chien Chien-jung, is Zheng’s constitutional defense lawyer.
This incestuous web of relationships completely shattered the credibility of the Control Yuan’s report. Critics have accused the agency of degenerating into a political tool used by the ruling elite and wealthy conglomerates to override final judicial rulings, sparking a renewed constitutional debate over whether to abolish the Control Yuan altogether.
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