LED chip supplier Formosa Epitaxy Inc (ForEpi, 璨圓光電) on Tuesday said it had not been affected by controversy over Chinese LED epitaxy maker Sanan Optoelectronics Co’s (三安光電) accounting practices.
ForEpi agreed last year to sell 120 million new shares at NT$19.6 each to Sanan via private placement to raise NT$2.35 billion (US$78.7 million), giving Sanan a 19.9 percent stake in the Taiwanese firm.
In its latest edition, released on Monday, Chinese-language Capital Week magazine said that more than half of Sanan’s accumulated profits were from Chinese government subsidies and accused the company of violating China’s procurement laws while bidding for the Chinese government’s LED street light projects.
ForEpi said it could not comment on the report.
Since the Investment Commission is still reviewing the private offering proposal, Sanan has not become a ForEpi shareholder and therefore cannot impact ForEpi’s business, the company said.
The commission yesterday declined to comment on the report.
Capital Week‘s story questioned Sanan’s approach in selling used gold to generate non-operating income of up to 60 percent of its net profit.
Sanan yesterday issued a statement saying that including sales of used-gold in its non-operating income was in line with accounting rules.