Telecoms must go public: NCC

Most Taiwanese fixed-line operators will soon be required to float shares and disclose financial statements frequently based on a new regulation, an official at the nation's de facto telecommunications authority said yesterday.

"By boosting financial transparency, we hope to avoid any irregularities from occurring in the future," the National Communications Commission (NCC) official said in a telephone interview.

The new rule is expected to take effect within six weeks, or by June at the earliest, said the NCC official, who requested anonymity.

The rule was drafted after the eruption of a financial scandal involving private-owned Asia Pacific Broadband Telecom Co (亞太固網寬頻), a subsidiary of the Rebar Asia Pacific Group (力霸亞太企業集團).

It stipulates that fixed-line companies with capital of more than NT$200 million (US$6.05 million) must be listed companies and post financial reports each quarter or twice a year.

As a result, fixed-line operator Asia Pacific Broadband, which has NT$65.68 billion in capital, would have to go public, the NCC official said.

Money-losing Asia Pacific Broadband is under government receivership since investigators alleged that parent company Rebar Asia Pacific Group, owned by the family of fugitive Wang You-theng (王又曾), misappropriated corporate funds by hiding the company's real financial figures.

Wang is the former chairman of the fixed-line company.

Its president, Wang Lin-tai (王令台), was detained for alleged embezzlement of corporate funds, leaving the telecommunications company's net value down to less than NT$1.5 per share, reports have said.

Companies face up to NT$3 million in penalties or could lose their permits if they break the law, the NCC official said.

Asia Pacific Broadband is the only fixed-line company among the nation's five fixed-line service providers that does not publicly trade its shares.

Rivals Chunghwa Telecom Co (中華電信), the nation's biggest phone company, Taiwan Fixed Networks Co (台灣固網) and New Century Infocomm Tech Co (新世紀資通) have their shares traded on the nation's major or secondary stock markets. The companies have NT$96.68 billion, NT$64.54 billion and NT$47.5 billion in capital respectively.

Prosecutors raided Asia Pacific Broadband in early January.

At that time, both the Ministry of Economic Affairs and the NCC appointed independent accountants as auditors at the fixed-line telecom operator.

Under the economics ministry's instruction, the company's board elected Lai Chun-tien (賴春田) as acting chairman on Feb 14.

On March 6, Vice Minister of Economic Affairs Shih Yen-hsiang (施顏祥) said Asia Pacific Broadband might consider cutting its paid-in capitalization and then increasing capital to strengthen its financial structure in order to meet the requirements for fixed-line operators.

At the time, the firm's net worth was under NT$40 billion (US$1.21 billion), the threshold for fixed-line operators.

Last week, the board of Asia Pacific Broadband discussed a proposal to cut 86 percent of its capital to dilute losses and boost net value.

But board directors did not reach a conclusion on the capital reduction proposal, as the reduction would represent massive losses for shareholders.

The company is scheduled to hold a shareholders' meeting on April 30.