Minister of Finance Lin Chuan (
"Not only did the chairwoman fail to make clear the company's cash flow, but the company also showed how poorly it was following corporate governance principles," Lin said.
Lin said the ministry would direct the Securities and Futures Commission (SFC) to demand that Procomp explain whether its financial performance had been covered up to conceal possible wrongdoings.
Financial authorities are expected to launch a thorough investigation into Procomp's financial situation to clarify the reasons behind its default on the bond payments before any legal steps can be taken, Lin said.
He added that investigators would scrutinize the three foreign banks which froze the company's funds, the accountancy firm which certified Procomp's March financial report (Deloitte Touche Tohmatsu), as well as the company's management under Yeh's leadership.
On Thursday, Yeh defended herself at a press conference, shrugging off questions about why the company defaulted on the bond payments due on that day despite having NT$6.3 billion worth of financial derivatives in its accounts, according to its certified financial reports in March.
The 46-year-old Yeh only said the funds were deposited in three foreign banks -- Commonwealth Bank, Rabobank International (Singapore branch) and Metro Bank -- and had been frozen for unknown reasons.
Yeh denied any wrongdoing, but indirectly blamed Citigroup Global Markets Taiwan Ltd, which arranged Procomp's overseas bond sale, for leaking the sale's pricing process while the company's stock prices were falling.
Both Yeh and Citigroup Global Markets chairman Tu Ying-tzyong (
Wu Tang-chieh (
Wu admitted that the commission's advanced warning regulatory system to prevent similar financial irregularities is flawed. He said the system will be improved to deal with such cases in the future.
Lin vowed to do more to ensure the transparency of financial disclosure among all listed companies.
Although most of Procomp's creditors refused to give their approval to the company's application for a two-year restructuring plan, the ministry's Bureau of Monetary Affairs is evaluating the feasibility of approving the restructuring application.
Taiwan Securities Co (
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