The insolvency claims by China Rebar Co (中國力霸) and Chia Hsin Food & Synthetic Fiber Co (嘉新食品化纖) prompted two financial regulators to slap heavy fines on the companies yesterday, highlighting the seriousness of the companies' delayed disclosure of critical information to investors.
The Taiwan Stock Exchange yesterday slammed an additional NT$950,000 (US$29,000) fine on each firm, bringing the total penalty to NT$1 million -- the highest fine allowed -- for each company.
The stock regulator had already imposed a NT$50,000 fine on each last Thursday, after both companies made public their applications for insolvency protection.
Chia Hsin said in a filing to the Taiwan Stock Exchange that three of its checks for NT$1.67 million had bounced and China Rebar also said 97 of its checks for NT$261.07 million had bounced.
As the Taipei District Court has approved both companies' request for insolvency protection, they need not cover their debts for now, they said in the filings.
The request by China Rebar and Chia Hsin, which both fall under the parent Rebar Asia Pacific Group (力霸亞太企業集團), received the approval of the Taipei District Court last Thursday, a decision which could pave the way for corporate restructuring.
Both companies filed their applications with the court on the afternoon of Dec. 29 but only notified the Taiwan Stock Exchange last Thursday, a two-day delay following the New Year holiday.
China Rebar and Chia Hsin on Friday admitted the delay in making the request public was the result of negligence as well as the holiday.
The stock regulator said the delayed action had an impact on share prices and prevented investors from reacting promptly to the sudden suspension of trading last Thursday.
The Financial Supervisory Commission, which supervises and regulates local financial holding companies and the banking sector, also imposed fines of NT$2.4 million -- the highest allowed -- on each firm due to late disclosure of information.
Meanwhile, news of the insolvency protection request sent shares of Eastern Media International Corp (
Eastern Media, Taiwan's largest media group was spun off from Rebar Group in 2004 and has since been an independent firm with no financial ties to Rebar, Eastern Media chairman Gary Wang (王令麟) said last week.
To clarify the relationship with the group, Wang also changed the name of his real estate arm, Rebar Rehouse (力霸房屋), to Eastern Realty (東森房屋) in 2005.
Eastern Realty is a major property agent in Taiwan, with 430 outlets nationwide.
Gary Wang, the son of Rebar Group chairman Wang You-theng (
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