Brokers come to Procomp clients' aid

"To uphold investor confidence and help safeguard local equities markets, the brokers agreed to pay part of the damages caused by Procomp management's embezzlement."

The Securities and Futures Investors Protection Center

The underwriters of Procomp Informatics Co's (博達科技) share sales agreed to pay part of the colossal damages claimed by shareholders of the Taiwanese chipmaker for corporate fraud, an investor protection center said yesterday.

"To uphold investor confidence and help safeguard local equities markets, the brokers agreed to pay part of the damages caused by Procomp management's embezzlement," the Securities and Futures Investors Protection Center (投資人保護中心) said in a statement.

Procomp shareholders will be able to receive a total of NT$78.10 million from Yuanta Core Pacific Securities (元大京華證券), Fubon Securities Co (富邦證券), Hua Nan Securities Co (華南永昌證券) and Taiwan International Securities Corp (金鼎證券) after prolonged negotiations, according to the statement.

"The brokers' move will greatly boost investor confidence," the watchdog said.

The amount is negligible, however, compared to an informal estimate of NT$5 billion in losses claimed by 9,300 Procomp shareholders.

The accounting scandal launched a bombshell onto Taiwan's stock markets in June of 2003, scaring away investors, who feared investing in another Procomp.

Procomp chairwoman Sophie Yeh (葉素菲) was sentenced to 20 years in jail last October after pleading guilty to engineering a NT$7 billion accounting fraud.

The scandal was discovered after the chipmaker filed a restructuring plan in summer of 2003, amid financial difficulties. Since then, the investor's protection center has been helping the victims seek damages.

The center yesterday said it will carry on in its efforts to help Procomp shareholders claim damages from the company, its board members and the accountants responsible for oversight.

In addition to Procomp's case, the center is also helping shareholders of Pacific Electric Wire and Cable Co (太電), which is at the center of another accounting scandal. The center is in negotiations with the company and related authorities over damages.

Up to this point, some 28,000 people have filed requests with the center against Pacific Electric Wire and Cable, which could bring the total compensation figure close to NT$5 billion.