The Taipei District Court yesterday set bail for XPEC Entertainment Inc (樂陞科技) chairman Aaron Hsu (許金龍) after prosecutors sought court approval to detain him over alleged irregularities in a botched investment from a Japanese suitor, which caused massive losses for investors.
In late May, Bai Chi Gan Tou Digital Entertainment Co (百尺竿頭) announced it would acquire 38 million XPEC shares, or 25.17 percent of the company, at NT$128 per share, an almost 22 percent premium over the gaming software developer’s share price at the time, saying Bai Chi Gan Tou was upbeat about the Taiwanese firm’s prospects.
The acquisition was valued at NT$4.86 billion (US$155.1 million at current exchange rates) at the time.
Photo: Chien Jung-fong, Taipei Times
The offer prompted investors to buy XPEC shares with the expectation that Bai Chi Gan Tou would buy their XPEC holdings.
In June, XPEC’s share price surpassed NT$110.
However, reports emerged on Aug. 19 that Bai Chi Gan Tou would delay the acquisition, which pushed XPEC shares lower. Late last month, the Japanese firm requested an extension of a deadline for making a payment on the acquisition, and on Aug. 30 it announced it was walking away from the deal, resulting in a settlement default.
The default led to XPEC’s shares dropping to as low as NT$70.2 on the over-the-counter market on Aug. 31.
Those who purchased XPEC shares after the tender offer was announced sustained significant losses. The aborted acquisition saw XPEC’s market capitalization shed NT$10 billion.
It was the first settlement default of a tender offer in Taiwan’s equity market, which caught many investors and market analysts off guard. It prompted prosecutors and the Financial Supervisory Commission (FSC) to launch investigations into the case.
After questioning Hsu, prosecutors filed an application with the court at 6:50am yesterday for permission to detain him, accusing him of breaching the Securities and Exchange Act (證券交易法).
The court later set bail at NT$10 million.
Prosecutors asked the court to bar Hsu from meeting with anyone, apart from his lawyers.
Prosecutors this week also summoned for questioning others connected to XPEC, including media celebrity and former lawmaker Sisy Chen (陳文茜) and former Taipei deputy mayor Lee Yong-ping (李永萍).
Chen resigned as an independent director of XPEC after the failed tender offer surfaced, while Lee remains an independent director of the gaming company.
Former minister of economic affairs Yiin Chii-ming (尹啟銘), another independent director of XPEC, was also summoned, but did not attend, as he was overseas.
Prosecutors said Yiin would be summoned again when he returns to Taiwan.
Prosecutors on Friday conducted a raid of XPEC’s headquarters, Bai Chi Gan Tou’s Taipei office, as well as offices of CTBC Bank Co (中國信託銀行), CTBC Securities Co (中信證) and Concord Securities Co (康和證券), which were involved in the tender offer.
Local media yesterday reported that prosecutors suspect Chinese funds of being behind the failed tender offer.
Media reports cited prosecutors as saying that Bai Chi Gan Tou could be a paper company, which has business ties with the Chinese gaming market, adding that it was possible that Chinese investors had tried to manipulate the deal.
Before the offer proposed by Bai Chi Gan Tou, XPEC issued three tranches of convertible bonds worth NT$2 billion in March.
The FSC said it suspects that the bond sales could involve insider trading and share price manipulation and has reported its suspicions to prosecutors.
A sea warning for Typhoon Champi could be issued as early as Wednesday night, possibly followed by a land warning on Thursday night or Friday, as the storm approaches Taiwan, the Central Weather Administration (CWA) said yesterday. The typhoon is expected to have its greatest impact on Taiwan on Friday and Saturday, bringing heavy rain to central and northern Taiwan and to Yilan and Hualien counties in the east, CWA forecaster Liu Pei-teng (劉沛滕) said. As of 2pm yesterday, Champi was about 2,470km east-southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost tip, moving westnorthwest at 20kph. It had maximum sustained winds of 191kph and a
FRIDAY, SATURDAY: While Typhoon Champi might weaken, officials warned about large waves, while some transport services and tourist spots have been affected Typhoon Champi is forecast to have the greatest effect on Taiwan tomorrow and on Saturday, with a sea warning issued late last night and a land warning expected afternoon today, the Central Weather Administration (CWA) said yesterday. The storm’s projected track has shifted slightly westward and it could begin moving away from Taiwan toward Japan’s Kyushu island on Saturday, with the warnings potentially lifted as early as Saturday afternoon, CWA forecaster Chang Cheng-chuan (張承傳) said. As of yesterday afternoon, Champi was about 910km east-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, CWA data showed. Its maximum sustained winds had weakened slightly to
EAST OF GUAM: Tropical Storm Champi is forecast to strengthen into a typhoon, but its effect on Taiwan is uncertain due to the presence of a high-pressure system Tropical Storm Champi formed yesterday and has the potential to increase in strength, the Central Weather Administration (CWA) said yesterday. Forecasters are closely monitoring a Pacific high-pressure system that would dictate whether the storm turns north or moves toward Taiwan next week, the CWA said. The most likely scenario is that it turns northward after passing the Ryukyu Islands, CWA forecaster Cheng Chieh-jen (鄭傑仁) said. As of 8pm yesterday, Champi was east of Guam moving west-northwest at 20kph, CWA data showed. It had maximum sustained winds near the center of 72kph and gusts of up to 101kph, the data showed. If the Pacific high-pressure system
ORIGINS: A Taiwanese doctor practicing in Japan said he no longer needed to cover the nationality label on his license with a sticker, as it used to confuse his patients Starting this month, Taiwanese professionals working in Japan can list “Taiwan” as their place of origin following Tokyo’s easing of rules on “nationality” in official licensing documents. The change was announced yesterday by the Japan-Taiwan Friendship Parliamentarians’ League in Tokyo. The license revision covers 322 professions, including doctors and nurses. Previously, Taiwanese had to list “China” as their nationality on professional certifications and licenses, but the new rules updated the “nationality” to “nationality and region” or “nationality, etc,” allowing Taiwanese to use the name “Taiwan.” The league held a meeting about the revision at the House of Representatives Members’ Office Building in Tokyo
RSS