FSC disciplines CPAs linked to Rebar Group

By Amber Chung  /  STAFF REPORTER

Wed, Jan 17, 2007 - Page 11

The Financial Supervisory Commission yesterday punished two certified public accountants (CPAs) for their negligence in auditing the financial books of member firms of the scandal-plagued Rebar Asia Pacific Group (力霸亞太企業集團).

The commission said it would revoke the qualifications of both Shan Shih-ta (單思達) and Hao Li-li (郝麗麗) in auditing and certifying public companies' financial books for violations of the Securities and Exchange Law (證券交易法).

Shan and Hao, accountants at RSM International (廣信益群會計師事務所), were responsible for certifying the financial books of both China Rebar Co (中國力霸) and Chia Hsin Food & Synthetic Fiber Co (嘉新食品化纖) over the past five years.

According to the commission, both China Rebar and Chia Hsin applied to 24 creditor banks for payback extension in August of last year.

But the accountants didn't record the two Rebar companies' payback extension applications in their financial books for the year, or evaluate what potential impact the creditor banks' pending approval of payback extension might have on the two debt-ridden firms' financial assets and long-term development, the commission said.

The commission said the two accountants' negligence had caused serious damage to shareholders' rights and interests.

It has handed the case to prosecutors for further investigation and also suggested that the CPA's self-disciplining body consider further penalties for the accountants.

The commission is also investigating accountants who certified financial results for The Chinese Bank (中華銀行), which is another affiliate of the Rebar Group.

The commission instructed the Central Deposit Insurance Corp (中央存保) to take over the bank at midnight on Jan. 5 after two Rebar Group subsidiaries filed for insolvency protection.