The Securities and Futures Investors Protection Center (SFIPC) is seeking NT$2.87 billion (US$91.6 million) in compensation on behalf of investors affected by Bai Chi Gan Tou Digital Entertainment Co’s (百尺竿頭) failed acquisition of XPEC Entertainment Inc (樂陞科技).
The center said yesterday it has accepted 19,503 out of 19,862 applications from XPEC shareholders who had participated in the tender offer since it began receiving appeals on Sept. 8.
The reparation amount is based on the wild swing in XPEC’s share price, which tumbled to NT$45.75 on Sept. 8, when XPEC shares were released back to participating shareholders after the acquisition deal collapsed.
Bai Chi Gan Tou had originally offered to purchase 38 million XPEC shares at NT$128 to acquire a 25.17 percent stake in the Taiwanese video game developer.
The reparation amount, as well as the number affected investors, is likely to grow if XPEC shareholders who did not participate in the acquisition pursue legal action for capital losses sustained from the shares’ precipitous tumble, the center said.
The center also criticized Bai Chi Gan Tou’s proposed settlement plan as insincere and lacking in tangible measures toward resolving the ongoing dispute, adding that a meeting with the company on Sept. 21 was fruitless.
Bai Chi Gan Tou has made a hollow gesture in offering its current holdings of XPEC shares to fund reparations to investors, as court orders have already placed a provisional attachment order on the company’s assets, the center said.
Meanwhile, XPEC shares dropped by the daily 10 percent movement limit to NT$30.45 in Taipei trading yesterday as the company was hit with further troubles with delayed receivables.
XPEC said that it is prepared to funnel up to 200 million yuan in earnings from its overseas investments to fill the gap, it said in a filing to the Taiwan Stock Exchange yesterday.
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