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Asia Pacific Telecom `on track'

Asia Pacific Telecom Group (亞太電信集團), which is affiliated with the debt-ridden Rebar Asia Pacific Group (力霸亞太企業集團), yesterday said it was on track to break even this year amid speculation about embezzlement and corruption.

The group's clarification came after one of its fixed-line subsidiaries, the unlisted Asia Pacific Broadband Telecom Co (亞太固網), was alleged to have lied to shareholders and misappropriated funds.

As of yesterday, 41 Taiwanese companies said they had booked about NT$3.11 billion (US$94.9 million) in losses as a result of investments in the fixed-line service operator. Information provided by the Taiwan Stock Exchange Corp showed the firms planned to book more losses in the near future.

"The company's operations are normal. Employees are clocking in as usual. News reports that management misappropriated NT$80 billion are untrue," Asia Pacific Broadband Telecom president Wang Lin-tai (王令台) told reporters.

The company's chairwoman, Wang Chin She-ying (王金世英), fled to China along with her husband, Wang You-theng (王又曾), chairman of the Rebar Asia Pacific Group (力霸亞太企業集團), on Dec. 30 amid accusations of breach of trust and corporate embezzlement.

Up to 90 listed companies could be affected by the Rebar financial scandal, with potential losses amounting to NT$20 billion through investments in Asia Pacific Broadband Telecom, SinoPac Securities Corp (永豐金證券) said yesterday in a note to investors, citing data garnered from 2005 records.

Rebar Group affiliates Chia Hsin Food & Synthetic Fiber Co (嘉新食品化纖), China Rebar Co (中國力霸) and The Chinese Bank (中華銀行) invested NT$2.52 billion, NT$2.57 billion and NT$1.3 billion in the telecom service provider, respectively, SinoPac Securities said.

Both Chia Hsin and China Rebar were approved for insolvency protection last Thursday, while The Chinese Bank was taken over by the government last Friday.

Wang Lin-tai yesterday emphasized that investigators had not questioned him or searched the company.

He also dismissed media reports that Asia Pacific Telecom Group was in serious financial difficulty. He said the telecom group was on track to break even this year.

Total revenues would expand by 20 percent to NT$18.5 billion this year from NT$15.3 billion last year, mostly from the company's mobile and fixed-line businesses, Wang said.

The company hopes to boost third-generation (3G) subscribers to 1.38 million this year, from 1 million last year, he said.

The telecom group also owns 3G mobile service provider Asia Pacific Broadband Wireless Communications Inc (亞太行動寬頻) and Internet service provider Asia Pacific Online Services Inc (亞太線上).

Asia Pacific Telecom said it spent NT$10 billion for a 3G license and another NT$200 billion on building 2,300 base stations.

Still, SinoPac Securities recommended a wait-and-see strategy on financial stocks, given potentially mounting bad debts after Chia Hsin and China Rebar claimed insolvency protection.

The brokerage suggested investors steer clear of Mega Financial Holding Co (兆豐金控), which could be heavily exposed to the snowballing Rebar scandal.

Mega Financial is the largest single creditor of the ailing Rebar Group, with outstanding loans of NT$6.23 billion. The financial holding firm's NT$2.1 billion investments in Asia Pacific Broadband Telecom could dent its earnings by NT$0.2 per share, SinoPac Securities said.

Shares of Mega Financial declined 2.2 percent to NT$22.40 yesterday, after the firm said it planned to write off a further NT$749 million for investments in Asia Pacific Broadband Telecom.

Shin Kong Financial Holding Co (台新金控) saw shares close 1.8 percent lower at NT$32.10, after the company said in a statement to the stock exchange it would write off NT$416 million for investments in Asia Pacific Broadband Telecom.
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