Tsann Kuen Enterprises Co's (
The company is being investigated for illegally selling its US over-the-counter stocks, registered under the name of Eupa International Inc, to the public in Taiwan three years ago.
Shares plunged by 6.86 percent to close at NT$38 on the Taiwan Stock Exchange.
The nation's largest electronics retailer in terms of sales, Tsann Kuen had no comment yesterday on its alleged violation of the Securities and Exchange Law (
"The case is under investigation right now and we cannot make any comments on it," Tsann Kuen spokesman Ted Chen (
Tsann Kuen owned a 62.5 percent stake in the US unit through a share-swap deal with Access Network Co in October 2001. The US affiliate was later renamed Eupa International.
Eupa, with paid-in capital of NT$70 million, is Tsann Kuen's arm in the US and manages the company's US operations, such as patent issues and after-sales services. The US market accounts for over 40 percent of the firm's annual export of household appliance products.
Investigators accuse Tsann Kuen of selling Eupa shares to Taiwanese investors by claiming that Eupa would be upgraded to trade in the US NASDAQ market. Tsann Kuen has allegedly raised around NT$100 million by selling Eupa stocks here.
The company said Tsann Kuen Chairman Wu Tsann-kuen (吳燦坤), who heeded only one of three court summonses in recent months, is in China to oversee retailing changes and might return to Taiwan after Oct. 7 following China's national holidays.
Local media reports said Wu had told prosecutors that the shares in question are forgeries. As Eupa is still not able to trade shares on the NASDAQ, its stock price has dropped to around US$0.10 per share from the US$8 to US$10 per share investors paid three years ago.
Chen yesterday denied the company had sold any Eupa stock.
"We even increased the shareholding ratio to 66.99 percent instead," he said.
Though Chen denied a large-scale raid by investigators on Thursday, Taipei District Prosecutors' Office spokesman Lin Pang-liang (
Chen called the issue irrelevant to the company, as a recent anniversary sale left the firm with over NT$500 million in cash in addition to more than NT$10 billion worth of bank lending quotas.
The home appliance manufacturer and electronics retailer predicted annual revenue of NT$60 billion this year. The company operates 147 outlets in Taiwan and more than 40 stores in China.
Chen said the company's rapid expansion in the vast China market has posed logistical and management difficulties, so it is consolidating outlets in the Shanghai, Fujian and Xiamen areas to cut costs.
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