Papermaking conglomerate YFY Inc (永豐餘控股) yesterday said that it is to extend the maturity period of a five-year convertible bond issued by Giant Crystal Universal Development Inc, a subsidiary of Sun Power Development and Construction Co (三寶建設).
Sun Power was unable to repay the debt on Tuesday — the maturity date of the US$8.5 million corporate bonds — and has requested to extend the repayment period, YFY spokesman Yin Kuo-tang (殷國堂) told a news conference in Taipei yesterday.
Yin said that the company’s management is to hold negotiations with its counterpart at Sun Power and plans to submit a proposal for extension of the debt repayment to YFY’s board before July 3.
The company has requested Sun Power repay US$12.29 million of the convertible bond before Sept. 20, including extra interest based on a 10 percent rate charged during the three-month period from this month through September, Yin said.
Ho Shou-chuan (何壽川), former chairman of SinoPac Financial Holdings Co (永豐金控) and a key member of YFY’s founding Ho family, was on Sunday ordered detained by the Taipei District Court for alleged illegal loans in violation of the Securities and Exchange Act (證券交易法).
He was accused of being involved in questionable loans of more than NT$5 billion (US$164.09 million) provided by the company through shell companies to take control of a commercial building in Shanghai in 2009.
The loans extended to Sun Power were transferred between paper companies owned by Sun Power and SinoPac Financial without sufficient collateral as well as a lack of proper documentation and authorization, which has raised questions over the group’s regulatory compliance and the reliability of its internal audit procedures, the Financial Supervisory Commission said.
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