Solar stock plummets after probe report

The nation's leading solar cell maker saw share prices tumble by the daily limit on the local bourse yesterday, with the company reportedly under investigation by prosecutors over alleged pump-and-dump stock scams.

Motech Industries Inc (茂迪科技) tumbled by the 7 percent daily limit to NT$731 (US$22.36) on the over-the-counter GRETAI Securities Market yesterday, on news that the Taipei District Prosecutors' Office has launched an investigation into the alleged scam on Thursday after receiving reports that some investors using several dummy share accounts had tried to manipulate share prices of Motech in last year's August-September period, when its shares were said to have traded ex-dividend.

Prosecutors are concerned that some of the company's shares were allocated to accounts that actually flowed back into the pockets of certain major shareholders.

In a statement made to the Taiwan Stock Exchange yesterday, Motech said the company was unaware of practices by investors outside the company, and none of its company officials were under investigation. Operations would remain normal, the statement said.

The report also dragged down related stocks yesterday. Shares of rival E-ton Solar Tech Co (益通光能) dropped by 6.64 percent to NT$1,055. The Tainan-based company made its debut on the local bourse on March 8 at NT$218 per share.

Formosa cable TV reported yesterday that E-ton was also investigated by prosecutors over its recent surge in share prices. The company denied the report, saying that investigators have neither searched the company nor questioned any company staff.