Shareholders of Asia Plastics Recycling Holding Ltd (APR, 亞塑再生), which recycles used plastic scrap to make ethylene-vinyl acetate foam in China, agreed on Friday to reduce the company’s cash dividend this year from NT$2.5 to NT$1 to cope with the aftermath of accusations against the company made by US-based Glaucus Research Group California LLC.
Following the adjustments, the company is to distribute a cash dividend of NT$1 and a stock dividend of 25 percent this year, based on last year’s earnings of NT$6.44 per share.
“After Glaucus Research issued its reports against us, some banks decided to stop financing our company, while some of our clients lowered our credit line, making it necessary for us to retain more funds at hand,” Mark Hsueh (薛又瑋), a special assistant to APR chairman Ting Chin-tsao (丁金造), told the Taipei Times by telephone on Friday.
Hsueh said the management proposed the reduction of dividend payment via a motion during a closed-door meeting, and the proposal was passed despite the opposition of some shareholders.
“Most shareholders agreed that we have to take necessary measures to weather the current difficulties,” Hsueh said.
From April 24 through May 5, Glaucus Research issued four reports claiming that APR’s profit reports were fabricated, suggesting the company’s fair share price should be zero because it is incapable of repaying its debts with its actual profits.
APR denied all the allegations and filed criminal proceedings against the research group on April 28 for spreading false information and manipulating APR’s share price.
The Taiwan Stock Exchange said on May 2 that its preliminary investigation into APR’s financial state did not find any irregularities.
In the past three months, APR shares have dropped 27.43 percent, compared with the broader market’s 4.83 percent increase over the same period. The company’s shares closed at NT$67.2 on Friday in Taipei trading.
To help prevent its shares from falling, the company initiated a share buyback scheme between April 28 and June 30 and had purchased more than 300,000 shares as of Friday, APR senior manager Gary Wang (王維民) said.
Also on Friday, shareholders of Oriental Union Chemical Corp (東聯化學), which makes ethylene glycol, approved Oriental Union’s proposal to pay a cash dividend of NT$1.2 per share, based on profit of NT$1.45 per share last year.
Oriental Union president Tsai Hsi-chin (蔡錫津) said the company would post a similar profit this year.
He also predicted that gross margin in the second half of this year would post a sequential increase from the first half as prices for ethylene, a raw material for making ethylene glycol, declines because of rising production and as its competitors in the Middle East conduct annual maintenance.