What to do if a listed company is accused of embezzlement or improper transfer of benefits? First, investigate special breaches of trust, irregular transactions, and corporate damages.

"The company has been hollowed out" is a common accusation in major financial criminal cases.

However, from a criminal law perspective, "hollowing out" is not a single crime. Related topics can be found in [link to relevant documentation].Serious Crimes and Criminal Defense under Securities Trading Law.

What prosecutors might actually argue often includes:

Article 171 of the Securities Exchange LawThe first item, paragraph two, concerning unconventional transactions;

Special breach of trust or misappropriation of company assets as defined in Article 171, Paragraph 1, Subparagraph 3;

Criminal breach of trust;

business misappropriation;

Commercial Accounting Law;

The financial statements are inaccurate;

Even other corporate or financial crimes.

For example, the company may be accused of:

Selling assets at low prices to related companies;

Purchase assets from related parties at inflated prices;

Paying unreasonable consulting fees;

Lending company funds to major shareholders or related companies;

Providing unreasonable guarantees for other companies;

Using company funds to pay for personal expenses;

Transferring business opportunities from one's own company to another;

Creating false accounts to conceal the flow of funds.

These situations could all be described as "hollowing out".

But once a criminal case is initiated, every transaction still requires an explanation:

Who makes the decision?

Who has the authority?

Who is the counterparty in the transaction?

Why do it?

How is the price determined?

What does the company get?

Who benefits?

How much did the company actually lose?

And whether the defendant intentionally violated his/her duties for his/her own or a third party's benefit.

Therefore, major corporate embezzlement cases cannot be solved solely by:

"The money flowed to people with connections."

The crime determination is completed directly.

What really needs to be done is:

Reconstruct each transaction from its business purpose, decision-making process, cash flow, accounting, and corporate damage.

First, "company embezzlement" is not a single crime under the law.

As commonly reported in the news:

Hollowing out the company;

Transfer of benefits;

Five Ghosts Transporting Goods;

Related-party transactions;

Asset transfer,

Under criminal law, they may fall under different charges.

The three most common directions are:

First, non-routine transactions under the Securities Exchange Act.

Specific personnel of a company that has issued securities in accordance with the Securities and Exchange Act caused the company to engage in transactions that were unfavorable to the company and contrary to normal business practices, resulting in significant damage to the company.

Second, special breach of trust under the Securities Exchange Act

A director, supervisor, or manager of a publicly traded company who, with the intent to benefit himself or a third party, breaches his or her duties or misappropriates company assets, causing damage to the company to the legal threshold.

Third, general criminal law breach of trust or embezzlement.

If the company, the perpetrator's identity, or the amount of damage does not meet the special provisions of the Securities and Exchange Law, the case may still revert to the criminal law judgment of breach of trust or embezzlement.

So the first thing to do is not to ask:

"Is it hollowed out?"

Instead, ask first:

Which crime is the prosecution ultimately arguing against?

Unconventional transactions vs. blatant breach of trust

Unconventional transactions

The number of perpetrators is relatively large.
Unprofitable + Transactions not in accordance with normal business practices
Significant damage to the company

Special breach of trust

Directors/Supervisors/Managers
For one's own or a third party's benefit
Violation of duty or misappropriation of company assets
The company suffered damages of 5 million yuan.

The above is for conceptual guidance only; the specific elements of a crime should still be determined item by item based on the provisions and evidence in each case.

II. Article 171, Paragraph 2 of the Securities Exchange Act: What is "non-routine trading"?

Article 171, Paragraph 1, Subparagraph 2 of the Securities Exchange Act stipulates:

Directors, supervisors, managers, or employees of companies that have issued securities in accordance with the Securities and Exchange Act may be subject to serious criminal liability if they cause the company to engage in transactions that are unfavorable to the company and contrary to normal business practices, resulting in significant damage to the company, whether directly or indirectly.

These types of cases are common:

Buy assets at high prices;

Selling company assets at a low price;

Unreasonable related-party transactions;

Loans with irregular funds;

The company assumes unreasonable debts for others;

Transactions lacking reasonable consideration;

Transfer of assets or business opportunities.

But the law does not stipulate:

"It's a crime to lose money in a trade."

The company makes business decisions every day.

Many transactions may have had a legitimate purpose at the time, but later resulted in losses due to market conditions, prices, policies, or operating results.

Therefore, what unconventional trading really needs to analyze is:

At the time of the transaction, was it clearly not in the company's best interest and did it deviate from normal business practices?

Third, judging "non-compliance with business practices" cannot be done solely by retrospective analysis of the outcome.

Suppose the company invests 50 million yuan in a startup.

Two years later, the startup failed, and the investment was wiped out.

This was certainly a failed investment.

But it cannot be solely because:

The company ultimately lost 50 million yuan.

Regarding automatic inference:

"It must have been against standard business practices back then."

Further confirmation is needed:

Was there any investment assessment at the time?

Market data;

Financial forecasts;

Professional consultant;

Board discussion;

Valuation;

Transaction terms;

Other investors;

Risk disclosure;

Commercial purposes.

Conversely, if the transaction existed from the beginning:

Clearly unreasonable price;

No assessment was conducted.

The counterparty in the transaction is a company with a controlling shareholder relationship;

The company did not actually receive any consideration;

Or the decision-making process deliberately avoids normal review.

The criminal risk will increase significantly.

therefore:

Business decision failures and criminal irregularities are not the same thing.

This firm has a separate office.Defense in Major Financial Criminal Cases of Listed CompaniesA dedicated service page that integrates defense efforts related to searches, detention, transaction flows, and accounting documents.

IV. Is a transaction involving related parties a crime? No, the key is the conditions and purpose.

Transactions between a company and related parties are not necessarily illegal.

There are often the following between group companies:

purchase;

Sale;

Funds lending;

lease;

Serve;

Technology licensing;

Asset transactions;

Management fee;

Financing.

Therefore, we see:

"The counterparty in the transaction is another company owned by the chairman."

It cannot prove a crime on its own.

What really needs to be checked is:

Does the transaction have any actual commercial purpose?

Is the price reasonable?

Is there a market comparison?

Whether the normal decision-making process was followed;

Whether the conflict of interest has been disclosed;

What did the company actually obtain?

Is the transaction clearly disadvantageous to the company?

And ultimately, who benefits from it?

The identification of related persons is an important warning sign.

However, this is not the entirety of the elements of a crime. From the perspective of shareholder verification, please refer to [further details].Shareholders suspect the company has been emptied of its assets..

V. What situations are most likely to be considered "transfer of benefits"?

Common allegations of improper transfer of benefits in major financial cases include:

The company purchased assets from a company related to its major shareholder at a high price;

Selling company land or stock to related parties at a low price;

Paying consultant fees for services that are not actually provided;

Paying clearly unreasonable commissions;

Transferring company orders to related businesses;

The company lent money to related businesses and then failed to repay it for a long period of time.

Providing guarantees for related companies without receiving reasonable returns;

The company bears the expenses that should be borne by private individuals.

However, criminal cases cannot rely solely on:

"It seems very unreasonable."

I still need a specific answer:

What is a reasonable price?

Are there any comparable standards on the market?

Did the company obtain any other benefits?

Is there a formal contract?

Has the contract been fulfilled?

Where do the funds ultimately go?

Did the individual or a third party actually profit?

VI. Article 171, Paragraph 3 of the Securities Exchange Act: What is "special breach of trust"?

Article 171, Paragraph 1, Subparagraph 3 of the Securities Exchange Act stipulates:

Directors, supervisors, or managers of companies that have issued securities in accordance with the Securities and Exchange Act may be charged with special breach of trust or related crimes under the Securities and Exchange Act if they act in violation of their duties or embezzle company assets with the intent to benefit themselves or third parties, causing damage to the company up to NT$5 million.

Therefore, it needs to be broken down into at least several issues:

First, is the defendant a director, supervisor, or manager as defined by law?

Second, what are his job duties and authority?

Third, which specific duty did he violate?

Fourth, what benefit is being gained for oneself or for a third party?

Fifth, what damage did the company actually suffer?

Sixth, does the company's damages reach 5 million yuan?

These issues are all indispensable.

7. What is the biggest difference between special breach of trust and general breach of trust under criminal law?

Article 342 of the Criminal LawThe core of the general crime of breach of trust lies in:

A person who handles affairs for others

Intending to illegally benefit oneself or a third party, or to harm one's own interests.

And this constitutes a violation of the mission.

This could cause damage to one's property or other interests.

The special breach of trust provisions in the Securities Exchange Act are serious financial crimes designed for specific senior personnel of publicly traded companies.

It is for:

Identity of the actor;

Company type;

Company damages;

statutory penalty

They all have special requirements.

The basic penalty for serious crimes under Article 171, Paragraph 1 of the current Securities Exchange Law is:

Three to ten years.

The difference between this and Article 342 of the Criminal Law, which stipulates a maximum sentence of five years for breach of trust, is very large.law.moj.gov.tw)

Therefore, once the prosecution determines that Article 171 of the Securities and Exchange Act may apply to the case,

The entire criminal risk would be completely different. See relevant articles for further discussion.The company's head was accused of breach of trust..

8. A company's damages of 5 million yuan are a very important threshold for special breach of trust.

Article 171, Paragraph 1, Subparagraph 3 of the Securities Exchange Act requires:

The company suffered losses amounting to NT$5 million.

Therefore, special breach of trust cases cannot only prove:

"The defendant violated his/her duties."

Further processing is needed:

How much did the company actually lose?

For example, the company purchased an asset for 80 million yuan.

The prosecution argued that the reasonable value was only 60 million yuan.

So, is the company's damages 20 million yuan?

This needs to be confirmed first:

How is a reasonable price determined?

Has the company acquired any other rights or incidental benefits?

Is the valuation correct?

Timing of the transaction;

And whether the so-called loss has actually occurred.

"Amount of damages" is usually not just a simple accounting figure.

And may require:

Valuation;

Appraisal;

Market data;

Financial data

Joint judgment.

9. If the company's damages are less than 5 million yuan, is it necessarily innocent?

No, not exactly.

Article 171, Paragraph 3 of the Securities Exchange Law stipulates:

If the actions described in the first item, third paragraph, cause damages to the company that do not reach 5 million yuan,

It may be punished in accordance with the provisions of criminal law regarding embezzlement or breach of trust.

therefore:

The 5 million yuan threshold primarily affects whether a case falls under the special criminal liability framework for breach of trust under the Securities Exchange Law.

This does not mean that those who commit less than 5 million yuan are completely free of criminal liability.

The case still needs to be returned to:

Behavior;

Position;

Purpose of interest;

property;

damage

judge.

10. "Misappropriation of company assets" and "breach of trust" should not be confused.

Article 171, Paragraph 1, Subparagraph 3 of the Securities Exchange Act also mentions:

Violation of official duties;

And misappropriation of company assets.

However, the factual structures of the two behaviors may be completely different.

For example:

Breach of trust

The board of directors arranged for the company to purchase assets of related companies at unreasonable prices.

The core idea is:

Decision-making and transactions.

Invasion

The company funds, which were originally legally managed by the manager, were subsequently diverted to private use.

The core may be closer to:

Possession and disposal of company assets.

Therefore, major financial cases cannot be viewed solely from the perspective of:

"The company has less money."

They just mixed all the crime names together.

11. Could a company paying its boss's personal expenses become a case of embezzlement?

It may become a focus of investigation, but not every transaction will necessarily lead to a crime.

For example, company payments:

Private residential expenses;

Family travel;

Private vehicles;

Expenses for relatives;

Personal credit cards;

Consumptions unrelated to company business.

Further confirmation is needed:

Are there any company policies?

Is it a legal salary or benefit?

Has it been approved?

Has it been recorded?

Accounting subjects;

Amount;

Should it be returned?

And whether I had the subjective intent to illegally obtain company assets.

Especially if the accounts also show:

Invoices that are not genuine;

False expenses;

Other cover-up documents,

This could further involve issues related to business accounting law or financial reporting.

12. Why is it easy for companies to be accused of transferring benefits when they lend money to related businesses?

Financial transactions between group companies are very common.

However, when the company lends a large sum of money to:

Another company controlled by the chairman;

Companies with major shareholder relationships;

Relatives' company;

A relative with very poor financial situation.

Prosecutors typically examine:

Why borrow?

What is the interest rate?

Is there a guarantee?

Do you have the ability to repay the loan?

Was a normal decision-making process followed?

Does the company itself have sufficient funds?

Has it actually been recovered?

If the transaction terms are significantly more lenient than those for a typical third party.

This could result in:

It is not in accordance with normal business practices;

Violation of duty;

Third party interests

Waiting for criminal issues.

13. Does the fact that the board of directors approved it necessarily mean there was no breach of trust?

uncertain.

A board resolution is an important piece of evidence.

However, it is not an absolute exemption from criminal liability.

Still need to see:

What information does the board of directors receive?

Was any important information withheld?

Whether the conflict of interest has been disclosed;

Do the directors truly understand the transaction?

Was the resolution process legal?

Is the price information accurate?

If the person in charge provides incomplete or false information, causing the board to approve a transaction without sufficient information,

Having a "board resolution" does not necessarily preclude criminal liability.

But conversely,

If the company has complete:

Evaluate;

Professional advice;

Comparison options;

Board discussion;

Conflict of interest management

It may also serve as important evidence to prove sound business decisions.

Fourteen, the prosecution cannot conclude that he made all the decisions simply because the chairman held the highest position.

A common problem in major corporate cases is that...

Using formal professional titles to presume actual roles.

For example:

"He's the chairman, so he must know."

However, criminal liability should still be based on specific evidence.

Confirmation required:

Who proposed the deal;

Who negotiates the terms?

Who does the financial analysis?

Who prepares the board meeting materials?

Who decides to make the payment;

Who is in contact with related companies?

To what extent is the chairman actually involved?

Some companies are highly centralized.

Some companies have a clear division of labor.

The professional title on a business card cannot replace actual criminal behavior.

15. Conversely, one cannot simply conclude by saying, "I am just the chairman; the actual work is done by the subordinates."

Defense in major financial criminal cases cannot simply involve severing responsibility.

If the volume already contains:

Email;

LINE;

Meeting minutes;

Approval;

Payment instructions;

Transaction negotiations;

Witness statement

Prove that the defendant actually participated,

In just one sentence:

"I have no idea."

This is usually insufficient to handle the situation.

A more effective approach is to distinguish precisely:

He certainly knows those things;

When will we know?

Why make the decision;

Based on what information;

What the company expects to gain;

And which subsequent actions are beyond one's control.

16. Has the company truly suffered any damage? We cannot simply look at "how much money the company paid out".

For example, a company pays 50 million yuan to buy an asset.

It cannot be said directly:

The company suffered a loss of 50 million yuan.

Because the company acquired assets at the same time.

The real damage might be:

Actual payment price

minus

To obtain the fair value of the assets.

Or we also need to consider:

Other incidental rights;

income;

burden;

Market value.

Similarly, the company pays a consulting fee.

It is also wrong to consider all of it as damages simply because the amount is large.

First, confirm:

Is there any service?

Service value;

Work results;

Market conditions.

Company expenses and company damages are not the same concept.

17. The 100 million yuan in proceeds of crime and the 5 million yuan in damages suffered by the company are two completely different figures.

Major securities law cases can easily confuse the numbers.

Special distinction is required:

5 million yuan

The threshold for damages to a company for special breach of trust under Article 171, Paragraph 1, Subparagraph 3 of the Securities Exchange Act.

100 million yuan

The important aggravated penalty threshold of Article 171, Paragraph 2 of the Securities and Exchange Act, which pertains to "property or property benefits obtained through crime".

These are not the same thing.

The company may lose 200 million yuan.

But what was the actual criminal profit obtained by the defendant or a third party?

Further calculations are still required.

in turn,

You can't just take:

Total transaction amount;

Company expenses;

Asset prices

It should be treated directly as proceeds of crime.

18. The most important aspect of related-party transactions is the "ultimate beneficiary".

In many cases of embezzlement, the funds are not directly transferred to the directors' personal accounts.

And it may pass through:

Related companies;

Consulting firm;

supplier;

relatives;

Investment company;

Overseas company.

Therefore, cash flow analysis cannot stop at the first level of the payee.

Further confirmation is needed:

The company's ultimate controlling shareholder;

Subsequent flow of funds;

Whether to reflux;

Whether it is used to purchase private assets;

Whether to pay to other co-defendants;

And the relationship between the defendant and the beneficiary.

But it can't be the other way around because:

"In the end, the money was received by the relative's company."

The analysis of whether the transaction itself is legal is omitted.

19. Accounting vouchers, though written, cannot completely replace actual transactions.

Hollowing out cases often involve:

Consulting fees;

Prepayment;

Temporary payment;

Shareholder transactions;

Other receivables;

invest;

loan;

commission;

Management fee.

These accounting items can help understand transactions.

However, the legal nature cannot be determined solely by the subject name.

For example, it is written in the account:

"Consultant Fee"

The real question is:

Is there a consulting contract?

What services were provided?

Is there a report?

Who instructed the payment?

Who is the recipient?

Therefore, major financial cases often require:

Accounting information

and

Original business documents

Cross-comparison.

20. If the company's books or vouchers are also inaccurate, it may also involve the Commercial Accounting Law.

Major corporate embezzlement cases sometimes involve more than just the flow of funds.

To explain or conceal the transaction,

It is also possible that:

Invoices that are not genuine;

False vouchers;

Incorrect summons;

Inaccurate accounting records;

False financial reports.

At this point, the case may involve:

Securities Exchange Law;

Commercial Accounting Law;

Even other document or financial statement crimes.

But every law:

The actor;

document;

Subjective intent;

Legal requirements

These still need to be assessed separately. For further details on how transactions are recorded in the books and financial statements, please refer to [link/reference needed].False transactions, misreporting of financial statements and criminal liability under commercial accounting law.

It cannot be just because the prosecution believes the transaction constitutes a transfer of benefits.

This leads to the inference that all relevant accountants were complicit in the crime. Further discussion can be found in [reference needed].Commercial accounting law and financial statement misrepresentation.

21. If a case involves both search and detention, the defense cannot only address the substantive breach of trust.

Major embezzlement cases often occur simultaneously:

search;

Seizure;

The Investigation Bureau summoned them for questioning;

The District Prosecutor's Office re-interrogated;

Detained.

Therefore, the case strategy should be divided into two parts:

Program line

Is the search legal?

Which documents have been seized?

Does the defendant pose a risk of colluding with others, destroying evidence, or fleeing?

Is there any need for detention?

solid line

Is the transaction contrary to normal business practices?

Did the defendant violate his/her duties?

Who benefits;

Did the company actually suffer losses?

How much damages were incurred?

We can't just rush to prove the transaction is reasonable.

However, there was absolutely no preparation for a detention hearing. For related issues, please refer to...Detention and Custody Court Battles in Securities Trading Law Cases.

We can't just focus on paying insurance premiums.

The company's transactions have not yet been processed. Please refer to the procedure details.Securities trading law research, interviews, and defense in major financial criminal cases.

22. How should the case files of major embezzlement cases be organized?

This type of case is very suitable for making a:

"Trading Matrix".

List of each major transaction:

Transaction date;

Both parties to the transaction;

Relationships between related parties;

Decision-maker;

Company payment;

The company received consideration;

Market price;

Board of Directors or Approval;

Accounting subjects;

Where does the money ultimately go?

Company damages;

The extent of the defendant's involvement.

This is how you can see:

Which transactions are truly unusual?

Which have a legitimate business background?

What is irrelevant to the defendant?

Which ones were simply grouped together in the same case by the prosecution?

23. Just because a company eventually goes bankrupt doesn't mean all previous transactions were fraudulent.

Company failure may stem from:

Market recession;

Economic prosperity;

compete;

Financing;

Technical failure;

Management error;

Inaccurate investment judgment.

Criminal liability still requires proof of a specific criminal act.

so:

The company later went bankrupt;

The stock price plummeted;

huge losses

It could be related to the case background.

However, it cannot be used automatically:

It is not in accordance with normal business practices;

Violation of duty;

Purpose of interest;

Company damages;

The defendant participated

Legal requirements, etc.

24. Conversely, having a commercial reason does not mean that all transactions are safe.

A defense cannot simply say:

"This is a business judgment."

If the actual data shows:

The trading conditions deviated significantly from the market;

The company has no reasonable demands;

The director has a significant conflict of interest;

No proper review was conducted;

The beneficiary is the company controlled by the defendant;

The company did not actually obtain any corresponding benefits.

Significant criminal risks may still arise.

So the real issue isn't whether there's a sentence:

"Business judgment".

Instead:

Can the business rationale be supported by objective data?

25. In cases of major embezzlement, if a confession or admission of guilt is to be made, the scope and proceeds of the crime should be clearly calculated first.

Article 171 of the Securities Exchange Act provides for commutation of sentence for certain acts of surrender, confession, and surrender of proceeds of crime.

However, in several major financial cases involving multiple individuals...

Not just because:

"Confession can lead to a reduced sentence."

He simply admitted to all the charges brought by the prosecution.

Before making a decision, at least confirm the following:

Which transaction should we acknowledge?

Which charge?

Which period?

How much damage did the company suffer?

How much of the proceeds from the crime were obtained?

Scope of co-defendants?

How much benefit did I actually obtain?

Because once a confession is formed,

Further potential impacts include:

Other charges;

Co-defendants;

Confiscated;

Civil claims for compensation.

26. Recent major securities transaction law cases have once again demonstrated the importance of "transactional defense".

Fidelity Law Firm has recently been appointed again to handle a major securities transaction law criminal case involving multiple defendants, investigative detention, and a large amount of corporate, financial, transaction, and criminal evidence.

Attorney Li Yusheng participated in the review of the case files and the criminal defense.

The real difficulty in these types of cases is often not a lack of knowledge of the securities trading law.

Instead, it is necessary to distinguish each transaction individually from dozens or even more:

Normal operation;

High-risk but reasonable business decisions;

Related-party transactions;

Company interests versus third-party interests;

And what the prosecution calls criminal transactions.

Attorney Li Yusheng previously served as the legal head of a large accounting firm. When handling corporate criminal and major financial cases, he would simultaneously draw upon:

Corporate governance;

contract;

Financial accounting;

Bank cash flow;

Company decision-making;

Criminal evidence

Reconstruct the context of the transaction.

Based on the principles of non-disclosure of investigations, protecting the privacy of the client, and safeguarding the interests of the defense, this firm will not disclose the case number, the defendant's name, or specific details of the investigation that have not yet been made public.

FAQ on Hollowing Out and Special Breach of Trust by Listed Companies

Does a transaction between a company and its directors' own company necessarily constitute a transfer of benefits?

Not necessarily. Related-party transactions are not inherently criminal. It is still necessary to analyze the purpose, price, procedure, consideration, company interests, ultimate beneficiary, and whether the transaction causes significant damage to the company.

Does a company's loss in a transaction necessarily mean that the transaction was not in accordance with normal business practices?

Not necessarily. Judgment should be based on the information, business objectives, assessments, prices, and decision-making processes at the time of the transaction, and not simply extrapolate the crime from subsequent losses.

What is the threshold for damages for companies subject to special breach of trust under the Securities Exchange Act?

According to Article 171, Paragraph 1, Subparagraph 3, the damages to the company must reach NT$5 million. If the amount does not reach NT$5 million, it does not automatically mean that the offender is innocent; they may still be judged under the provisions of the Criminal Code regarding breach of trust or embezzlement.

Does a company paying 5 million yuan mean the company has suffered a 5 million yuan loss?

Not necessarily. If a company receives corresponding assets, services, or other consideration, it must assess their reasonable value. A company's "expenditure" and "damage" are not necessarily the same.

Does the fact that the company's board of directors has approved the transaction necessarily mean there will be no breach of trust?

Not necessarily. Board resolutions are important evidence, but it is still necessary to check whether the information is complete, whether conflicts of interest have been disclosed, whether the procedures were followed properly, and whether the resolution was based on false or concealed information.

Does the fact that a related company receives company funds mean that the directors themselves have obtained proceeds of crime?

Not necessarily. Further confirmation is still needed regarding the control of related companies, subsequent fund flows, and ultimate beneficiaries. Company damages, third-party interests, and the defendant's own proceeds of crime must also be calculated separately.

Does Article 171, Paragraph 2 of the Securities and Exchange Law necessarily apply if a company's damages exceed 100 million yuan?

Not necessarily. Article 171, paragraph 2, examines whether the "property or property benefits obtained through the crime" reach 100 million yuan, not simply the total amount of damages or transactions to the company.

The company's accounts also have problems. Could this also involve the Commercial Accounting Act?

Possibly. If the transaction involves falsified documents, ledgers, financial statements, or other accounting information, it may also involve commercial accounting laws or other crimes. However, it is still necessary to determine the perpetrator, the documents, and the intent on a case-by-case basis.

The real issue to be debated in cases of embezzlement by listed companies is why each transaction occurred.

The most likely scenario in major corporate criminal cases is:

The case was initially described as follows:

"The person in charge embezzled company funds."

But once you actually get into the case file...

You will usually see:

Different transactions;

Different companies;

Different beneficiaries;

Different decision-making processes;

Different times.

Therefore, a truly effective defense is not simply saying:

"It wasn't hollowed out."

Instead, they answered each major transaction item by item:

Why do it?

Who decides?

What does the company get?

Is the price reasonable?

Who benefits?

How much did the company lose?

How much was the defendant involved?

Only after the transaction, cash flow, duties, and damages are all separated can it be determined whether the irregular transaction, special breach of trust, or other crimes under Section 171 of the Securities and Exchange Act are truly established.