XPEC Entertainment Inc (樂陞科技) shares yesterday soared by the 10 percent daily limit to close at NT$45.75, ending six consecutive sessions in which the stock fell by the maximum daily limit.
A total of 14.75 million shares were traded during the session, with buy orders on another 3.22 million shares and no more sell orders waiting to be carried out in the next session, Taiwan Stock Exchange data showed.
On Wednesday, prosecutors summoned XPEC chairman Aaron Hsu (許金龍) for questioning over Bai Chi Gan Tou Digital Entertainment Co’s (百尺竿頭) failed NT$4.86 billion (US$155.34 million) deal to acquire XPEC.
Hsu was named as a defendant in the case later that night.
He was released without bail, but has been barred from leaving the nation, according to a Taipei District Prosecutors’ Office statement.
The news caused a dramatic movement in XPEC shares yesterday morning, which plummeted by 10 percent to NT$37.45 the minute after Taipei Exchange opened the trading session, but recovered 15 minutes later after a flurry of buy orders boosted the stock to NT$45.75 at about 9:40am, according to the Taipei Exchange.
The company yesterday morning convened a provisional board meeting which Hsu attended and decided not to press charges against Bai Chi and the deal’s depository bank, CTBC Bank Co (中國信託銀行).
On Wednesday night, the company said it was planning to sue the two over fraud allegations.
Bai Chi on Tuesday last week withdrew a tender offer it proposed in late May to acquire 38 million XPEC shares, or a 25.17 percent stake in the gaming software developer, at NT$128 per share.
Local media reported that Hsu failed to shed light on the case when he met with prosecutors on Wednesday night.
Analysts said the stock price rebound could be short-lived.
XPEC issued a statement saying it believes the judicial system will find Hsu innocent.
The firm decided not to press charges against Bai Chi and CTBC Bank, as it considered legal action would take too long, XPEC said.
The company said it would cooperate with the Financial Supervisory Commission and prosecutors over the case and help investors seek compensation.
XPEC said its operations have not been affected by the incident.
In addition, its development of its new games for Square Enix Holdings Co Ltd remains on track and it has not suspended efforts to seek more orders from overseas clients, it said.
The company still plans to participate in the Tokyo Game Show in Japan next week and will showcase the company’s newly developed virtual reality (VR) game O! My Genesis VR there, according to the statement.
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