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SanDisk to Be Repaid for Embezzled Shares

November 17, 2003|From Associated Press

TAIPEI, Taiwan — A settlement has been reached between SanDisk Corp. and a Taiwanese law firm whose employee allegedly embezzled $83.3 million from the California high-tech company before disappearing last month, SanDisk said.

The theft involved the unauthorized sale of 127.8 million shares owned by SanDisk that were under the control of the law firm Lee & Li.

Lee & Li has given SanDisk a cash payment of $20 million, the company said in a statement issued Saturday night from its headquarters in Sunnyvale.

The law firm will pay SanDisk an additional $45 million over four years, it said. SanDisk also has been given an $18.3-million credit for legal services.

The alleged embezzler, Eddie Liu, is still missing.

"SanDisk will record a non-operating charge of $18.3 million to its third-quarter results, as the credit amount is unsecured," the statement said.

SanDisk, which makes flash memory cards, first announced the loss Oct. 15, one day after it was informed that the shares it owned in Taiwanese chip maker United Microelectronics Corp. were illegally sold, the statement said.

The transactions started Aug. 6 and ended Sept. 15, SanDisk said.

"The net proceeds from the unauthorized sales, amounting to approximately $92 million, were embezzled by a former employee of Lee & Li, who is now a fugitive," the statement said, adding that the shares' book cost was $83.3 million.

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