An investigation launched by the Taiwan Stock Exchange (TWSE) has found no falsification of Asia Plastic Recycling Holding Ltd’s (APR, 亞塑再生) financial records, despite a US-based research firm accusing the company of overstating its earnings.
The TWSE, which had sent a three-member team to APR’s production base in China on Tuesday, said on Friday that the team has found that the company’s financial records were authentic and were based on facts.
The TWSE said the investigating team probed a wide range of records, including the certification of APR’s accountants, the company’s transaction agreements, banking records and tax payment records.
APR, incorporated in the Cayman Islands, recycles used plastic bags and waste scraps to produce foam rubber products in China. The company launched a primary listing on Taiwan’s main board in August 2011.
In the first report of US-based Claucus Research Group about APR, which surfaced on April 24, the company was accused of overstating its financial data. The report alleged that the company’s actual earnings were about 90 percent less than what it had reported to the TWSE.
The report urged investors to sell APR shares and put the value of the stock at NT$0.
The negative tone struck by Claucus caused the company’s shares to plunge in the following sessions although the company strongly denied the accusations.
The volatility has prompted the Financial Supervisory Commission to launch an investigation by working with the TWSE.
Before a 7 percent technical rebound, which led to the company’s stock closing at NT$68.10 (US$2.25) on the main board on Friday, the stock had fallen more than 26 percent since the Claucus report.
Despite APR’s repeated rebuttals of the accusations, Claucus issued two other reports, insisting on the misrepresentation of the company’s financial statement.
On Friday, APR said the company was delighted by the TWSE’s investigation results, adding that its financial records were stated completely based on Taiwan’s securities listing regulations, which are aimed at protecting investors.
The company also expressed regrets about volatility in its share price caused by the Claucus reports, but promised to continue to strengthen its bottom line and provide a better return to investors.
APR posted NT$6.44 in earnings per share (EPS) last year, compared with NT$8.03 in EPS in 2012.
The commission said it would look into whether investors have suffered losses due to the Claucus reports and study the feasibility of suing the US research group on behalf of investors.
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