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Electronics mogul questioned
STOCK SPAT:
Wu Tsann-kuen was grilled in Taipei over the dodgy issuance of shares for a firm that was overrated and which lost shareholders almost all of their money
By Jimmy Chuang
STAFF REPORTER
Tuesday, Oct 12, 2004, Page 2
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Tsann Kuen Enterprises chairman Wu Tsann-kuen leaves the Taipei District Prosecutor's Office after being questioned by prosecutors.
PHOTO: LIN CHENG-FANG, TAIPEI TIMES
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The founder and chairman of Tsann Kuen Enterprises, the nation's largest chain of electronics stores in terms of sales, yesterday tried to persuade prosecutors that he and his company had not violated the Securities Transaction Law (證券交易法).
Wu Tsann-kuen (吳燦坤) was summoned by Taipei Prosecutor Chu Ying-hsiang (朱應翔), together with company vice president Catherine Tien (田竹英), after prosecutors alleged the company had been improperly selling stocks in the affiliated company Eupa International three years ago.
Questioning for about an hour, and Wu left the Taipei District Prosecutor's Office without making any comment.
But Tien said that the company had not conducted any illegal transactions.
"All of our stocks were sold through legal brokers," she said.
Testimony the pair and other Tsann Kuen employees seemed to displease prosecutors, and they said they may need to summon them again.
"Owing to the gag order, I cannot tell you what they have been discussing during questioning. But Chu and his fellow prosecutors will summon them again if necessary," prosecutor's office spokesman Lin Bang-liang (林邦樑) said.
Prosecutors Tsann Kuen of selling Eupa shares to Taiwanese investors by claiming that Eupa would be upgraded and trade in the US NASDAQ market. Tsann Kuen allegedly raised around NT$100 million by selling the stocks domestically.
The investigation showed that at least 35 local investors had purchased the shares.
On Sept. 30, Chu led a team of special agents from the Bureau of Investigation to raid Tsann Kuen's headquarters in Taipei City's Neihu district, but the company initially denied it had been raided.
However, after the raid was reported in the media, the company's shares plunged 6.86 percent on the same day to close at NT$38 on the Taiwan Stock Exchange. The company refused to comment because the case was still being investigated.
Chinese-language reports claimed Wu told investigators that the shares were forgeries. Unable to trade shares on the NASDAQ, Eupa's stock price has dropped to around US$0.10 per share from the US$8 to US$10 per share investors paid three years ago.
Tsann Kuen owned a 62.5 percent stake in the US affiliate after a share-swap deal with Access Network Co in October 2001. The affiliate was later renamed Eupa International.
Eupa, with paid-in capital of NT$70 million, is Tsann Kuen's arm in the US and manages the company's US operations, including patents and after-sales service. The US market accounts for more than 40 percent of the firm's household appliance exports.
The home appliances manufacturer and retailer predicted annual revenue of NT$60 billion this year. The company operates 147 outlets in Taiwan, more than 40 stores in China and is still expanding.
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