Tue, Mar 09, 2010 - Page 12 News List

TIS, Fulltech shares fall after offices are raided in Pang case

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Taiwan International Securities Corp (TIS, 金鼎證券) and Fulltech Fiber Glass Corp (富喬工業) fell in Taipei trading after their offices were raided as part of an investigation into Private Equity Management Group Inc, whose founder, Danny Pang (彭日成), committed suicide after being accused of lying to his investors.

More than 50 officers from the prosecutor’s anti-corruption taskforce and the investigation bureau conducted the searches on Friday at six locations, including the offices of securities brokerages and homes of related persons, the Taipei District Prosecutors’ Office said in a statement on Saturday.

Prosecutors searched the offices of Taiwan International Securities and two units, as well as homes including that of its chairman Lawrence Chang (張元銘) and of PEMGroup’s former manager in Taiwan, spokesman Wang Wen-de said at the prosecutor’s office yesterday.

Pang, who died on Sept. 12, was accused by the US Securities and Exchange Commission of lying to Taiwanese investors about his credentials, forging insurance documents and paying existing investors with funds raised from new ones, while claiming the returns came from investments in life insurance policies. Taiwanese investors lost more than US$800 million from PEMGroup investments, prosecutors said in a statement.

“The company didn’t sell any PEMGroup products,” Fred Chang (張慶隆), a spokesman for Taiwan International Securities, said by telephone yesterday.

A preliminary investigation by Taiwan International Securities showed some former employees may have privately sold US$15 million in PEMGroup products to investors, Jeff Chiu (邱顯富), president at the Taipei-based brokerage, said at a press briefing in Taipei yesterday.

The company will continue to cooperate with the prosecutors in the probe, Chiu said.

Taiwan International Securities fell 5.7 percent, the most since Feb. 5, to NT$8.28. The brokerage said in an exchange filing on Saturday that it was one of the companies searched. It denied any wrongdoing by the company or its chairman.

Fulltech Fiber dropped 4.5 percent, the most in a month, to NT$23.30. The company, which has Chang among its board members and Taiwan International Securities as a 2.6 percent shareholder, was also searched, it said in a filing on Saturday. Fulltech is not related to PEMGroup’s business in Taiwan and will cooperate with the investigation, it said.

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