Tue, May 13, 2008 - Page 12 News List

Polaris denies it bought shares at too high a price

BLOOMBERG

Polaris Securities Co (寶來證券), Taiwan’s largest online brokerage whose chairman, Wayne Pai (白文正), was questioned by prosecutors last night and released on bail, denied buying shares of its asset-management unit at “too high” a price in 2004.

Polaris fell to a seven-week low in Taipei trading yesterday after its office was searched on Friday by local prosecutors probing the 2004 transaction.

‘NO SUCH PROBLEM’

“There is no such problem of too high a price in our 2004 transaction,” Polaris vice chairman Peter Huang (黃古彬) said a briefing in Taipei yesterday.

“We have commissioned experts to evaluate the price and our accountants also thought the price was fair,” he said.

Huang said Polaris Securities in 2004 bought NT$899 million (US$29 million) of shares, or 28 percent of its affiliate, Polaris International Securities Investment Trust Co (寶來投信), from 22 individuals, 12 of whom are related to company management or board directors, including Pai. After the acquisition, Polaris Securities holds about 52 percent of the unit, he said.

DENIALS

Huang denied allegations made in an Economic Daily News report on Saturday that said Polaris executives were suspected of pocketing more than NT$500 million by selling shares in Polaris International Securities Investment back to the brokerage at an inflated price, citing prosecutors it did not identify.

BAIL

Pai was questioned by prosecutors last night and was released on NT$20 million bail, Huang said. Pai so far has no plan to resign from his position, Huang said.

Polaris dropped 6.9 percent, its daily maximum, to NT$19.65, the lowest since March 20, at the 1:30pm close in Taipei. The benchmark TAIEX index rose 0.4 percent.

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