The Financial Supervisory Commission (FSC) said yesterday it is mulling measures to crack down on “back-door listing” irregularities as a stock manipulation scandal surrounding Genome International Biomedical Co (基因國際) grows.
“Securities officials are reviewing back-door listing practices and may draw up an exit mechanism for companies with financial troubles or facing difficulty in trading shares,” commission Chairman William Tseng (曾銘宗) told lawmakers on the legislature’s Finance Committee.
Tseng was fielding questions over the probe into Genome, a Taipei-based medical equipment and healthcare services company, as well as the Top Pot Bakery chain (胖達人), which made headlines in August after it was found to be using artificial flavorings in what it claimed were “all-natural” products.
Genome was granted permission to trade its shares on the nation’s over-the-counter GRETAI Securities Market in December 2011 by acquiring an unprofitable chipmaker.
A back-door listing occurs when a privately held company not qualified for the public offering process purchases a publicly traded company and therefore gains automatic inclusion on a stock exchange. Such a listing usually indicates significant weakness in the acquired company and serves as a warning sign for investors to be wary.
The commission’s Securities and Futures Bureau (SFB) will meet later this month to address the issue, Tseng said.
Shares in Genome plunged by its daily limit for the second consecutive day yesterday to close at NT$74.3, bucking the TAIEX’s 1.73 percent gain, Taiwan Stock Exchange data showed, as sellers sought to dump shares, but could not find buyers.
Genome stock shed 42 percent for the past three months, while biotechnology players rallied 13.18 percent and the OTC index picked up 5.52 percent, according to the local bourse.
The company said in a stock filing it would cooperate with the investigation, which has no impact on its operations or financial standing.
Tseng said the delisting mechanism, once put into practice, would not have a back-dated effect on currently listed firms.
Securities officials would draw up a list of back-door listing companies and step up inspections as they tend to have financial or management problems.
Currently, firms may volunteer to delist, or be forced to do so at the request of regulators.
Share prices should not serve as an important reference, but not the decisive factor, in judging whether to delist a company or not, Tseng said, asking investors to be extra cautious about shares with abnormal movements.
The Securities and Futures Bureau’s new director-general, Wu Yui-chun (吳裕群), said shares with poor circulation are prone to manipulations.
Stock manipulation allegations have dogged Genome as its share prices soared from NT$60 in August last year to NT$212 in six months’ time, following its high-profile investment in Top Pot Bakery.
It shares nosedived this fall to NT$60 after the outbreak of the artificial flavorings scandal two months ago. The bakery chain refunded NT$85.75 million (US$2.9 million) to angry customers.
Genome is estimated to book NT$27 million in losses, in line with its stakes in the bakery, thereby weakening its earnings per share by NT$1 this year, local media reports said.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
Popular vape brands such as Geek Bar might get more expensive in the US — if you can find them at all. Shipments of vapes from China to the US ground to a near halt last month from a year ago, official data showed, hit by US President Donald Trump’s tariffs and a crackdown on unauthorized e-cigarettes in the world’s biggest market for smoking alternatives. That includes Geek Bar, a brand of flavored vapes that is not authorized to sell in the US, but which had been widely available due to porous import controls. One retailer, who asked not to be named, because
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
STILL LOADED: Last year’s richest person, Quanta Computer Inc chairman Barry Lam, dropped to second place despite an 8 percent increase in his wealth to US$12.6 billion Staff writer, with CNA Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興), the brothers who run Fubon Group (富邦集團), topped the Forbes list of Taiwan’s 50 richest people this year, released on Wednesday in New York. The magazine said that a stronger New Taiwan dollar pushed the combined wealth of Taiwan’s 50 richest people up 13 percent, from US$174 billion to US$197 billion, with 36 of the people on the list seeing their wealth increase. That came as Taiwan’s economy grew 4.6 percent last year, its fastest pace in three years, driven by the strong performance of the semiconductor industry, the magazine said. The Tsai