Formosa Plastics Group’s (FPG, 台塑集團) corporate governance could see a ratings downgrade by the stock exchange regulator, after the group confirmed yesterday that several executives and employees had resigned amid a bribery scandal.
In addition, the conglomerate’s oversight might affect its major subsidiaries’ capital increase applications in the future, the Securities and Futures Bureau said.
“We will express our reservations toward FPG subsidiaries’ future capital increase applications if criminal charges are filed against those executives,” a bureau official who declined to be named said by telephone, after the group was engulfed in the biggest bribery scandal in its 61-year history.
Market watchers said a reduction of the group’s corporate governance rating by the Taiwan Stock Exchange (TWSE) could affect state-run funds' attitude towards shares of its subsidiaries.
“All appropriate actions will be taken,” TWSE Chairman Lee Sush-der (李述德) said yesterday, without elaborating.
About 20 executives of the group’s Formosa Plastics Corp (台塑), Formosa Chemicals & Fibre Corp (台灣化學纖維) and Nan Ya Plastics Corp (南亞塑膠) are said to be involved in the scandal.
However, as the scandal is considered an internal matter, the Financial Supervisory Commission will not step in and initiate tangible measures against the group in the absence of criminal convictions against the executives for breach of trust and for breaking the Securities and Exchange Act (證券交易法), the bureau official said.
Shares of the group’s major subsidiaries dropped in Taipei trading yesterday on the bribery news, prompting speculation regulators would suspend their trading.
“According to revised guidelines, [the situation] does not warrant a halt in the trading of FPG shares,” TWSE corporate communications department associate Vivien Hou (侯采雯) said.
Trading is only halted to prevent prolonged disruptions and uncertainty in the market when companies are unable to provide immediate verification of major issues affecting trading of their shares, Hou said.
Since the group has been forthcoming with disclosures regarding the matter and the case has been submitted to prosecutors, the situation does not warrant a halt in the trading of FPG shares, Hou said.
Last month, the legislature approved a mechanism that is allows trading suspensions if a listed company is hit by scandals or has material information that could affect its share price. The new measure is to take effect on Jan. 15 next year.
Nonetheless, the group’s listed members are likely to face heightened scrutiny and audits in the future, as the case involved problematic internal governance involving the companies’ management, board of directors and accountants, Hou said.
Financial services company PricewaterhouseCoopers said that the ramifications of the FPG scandal will materialize next year when the TWSE releases its annual corporate governance report, pending the outcome of court rulings.
“FPG is currently a strong performer in terms of corporate governance, but we expect the company to take a hit in that category next year, in addition to diminished investor confidence,” PricewaterhouseCoopers sustainable development services chairman Daniel Chu (朱竹元) said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”