Gamemag Interactive Inc (磁力線上), an affiliate of troubled game developer XPEC Entertainment Inc (樂陞科技), has shut down due to financial woes involving its chairman Aaron Hsu (許金龍), affecting about 100 employees.
“The company has run out of funds amid poor demand. As the chairman is no longer able to run the company, the shareholders cannot support the firm anymore,” Gamemag said in an undated internal letter to its employees.
Chiang Pao-chia (蔣寶夏), who referred to herself in the letter as the representative of Gamemag’s largest shareholder, said that she will help negotiate with XPEC for employees who want to transfer there.
“Since the company is unable to pay wages this month, we suggest employees seek new job opportunities as soon as possible,” Chiang said.
Although Gamemag has shut down its Web site, the Ministry of Finance’s tax data show that the company was still in operation as of yesterday, which means the firm’s formal closure application has not been processed.
Gamemag was XPEC’s research and development unit for PC and mobile games.
It became an affiliate in January 2013 with paid-in capital of NT$200 million (US$6.49 million at the current exchange rate), according to data from the Ministry of Economic Affairs.
XPEC sold its shares in Gamemag several times over the past four years to JAFCO Asia, a Japanese venture capital firm, and Minseng Plastics Industrial Co Ltd (明盛塑膠), a Taiwanese film and photograph album maker, local media reported.
XPEC now only holds a 10 percent share in Gamemag, but Hsu remains chairman of both firms, according to XPEC’s annual report to shareholders in June last year.
Hsu has faced trouble since the failed sale of XPEC stock amounting to NT$4.86 billion, or a 25 percent stake, to a Japanese firm, Bai Chi Gan Tou Digital Entertainment Co (百尺竿頭), in August last year.
Hsu, XPEC’s former acting chairman Peter Lee (李伯衡), chief financial officer Hsieh Tung-po (謝東波) and seven other people were indicted on Jan. 24 by the Taipei District Court over alleged violations of the Securities Exchange Act (證券交易法) to manipulate XPEC’s stock price over the botched deal with Bai Chi.
XPEC’s trading was suspended by the Taipei Exchange on Nov. 17 last year after it failed to resubmit its financial statements for the second and third quarters.