More than 8,000 claims made against Procomp

A record high of over 8,000 complaints have arrived at the Securities and Futures Investors Protection Center (證券投資人及期貨交易人保護中心) from stock investors seeking compensation of more than NT$4 billion (US$118 million) from the defaulted Procomp Informatics Co (博達科技), the center said yesterday.

"The investors' complaints include compensation applications for convertible bonds worth NT$1.6 billion and securities worth NT$2.36 billion from the local chipmaker," said Michael Chao (趙順生), deputy director of the center's legal department.

Since the market value of the stock has fluctuated from time to time, Chao said that the total compensation amount may be slightly cut to over NT$3 billion.

As of yesterday, the center has thoroughly reviewed about 6,000 complaints and plans to finish filing the remaining complaints by having officials work overtime in the next two weeks, he said.

"After the review process is done, the center will officially file a lawsuit against Procomp's management, including its board members and supervisors, as early as late this month," Chao said.

To further safeguard investors' rights, other parties implicated in the financial scandal, such as accountants, underwriters and banks, will also be held accountable for negligence in the upcoming compensation lawsuit, he said.

Procomp was suspended from share trading in late June after it defaulted on a NT$2.98 billion bond payment. Prosecutors also detained Procomp chairwoman Sophia Yeh (葉素菲) on charges of violating the Securities and Exchange Law (證券交易法) and Public Certified Accountant Law (會計法).

Despite Procomp having declared bankruptcy, and although none of the personal assets of its management have been frozen, Chao yesterday said that the center would do its best to seek as much compensation as possible for investors.

In addition, the center plans to accept claims for compensation from investors of another financially distressed maker of high-tech products, Infodisc Technology Co (訊碟科技), in the near future.

In response to more than 2,000 complaints from Infodisc investors in 2000, the center in early September this year froze the personal assets of Infodisc chairman David Lu (呂學仁), his wife Chen Hui-chin (陳慧晶) and his brother-in-law Chen Cheng-yu (陳政宇) after the three were convicted of insider trading by the Taiwan High Court.

In preparation for filing a new compensation lawsuit against Lu, who was suspected of falsifying the company's financial report last month, the center is trying to collect as much evidence as possible to decide which investors will be eligible for compensation.

If claims that Infodisc has falsified its financial reports for several years are found to be true, more investors than those of Procomp may be eligible to apply for compensation, Chao said.

"The rights of Infodisc's investors may be better protected, since part of its management's personal assets has been frozen," Chao said.

The center is also accepting complaints from investors of the Chou Chin Industrial Co (久津實業) -- maker of Bomy brand (波蜜) vegetable and fruit juice -- since the company's management was accused of falsifying financial reports in 2002. With a deadline of Oct 24, over 100 complaints have been made to date to seek over NT$80 million from Chou Chin, Chao said.