The nation's share regulators yesterday banned Infodisc Technology Co (
In other words, trading in Infodisc shares will be restricted to cash-only transactions, according to stock regulators, the Taiwan Stock Exchange Corp (TSE) said.
Infodisc, a maker of compact discs and digital video discs, was found to have remitted US$77.75 million (NT$2.62 billion) from Rabobank's Singapore branch on June 30, which the company claimed went to an account of Gold Target Fund that it invested in. The fund is registered in the Cayman Islands. However, Infodisc failed to present concrete proof as of yesterday, as required by the stock exchange.
"The company merely submitted a written statement explaining the suspicious bill rather than any credentials issued by banks," Su Song-chin (
"We'll consider allowing the company to trade normally when it provides the required papers to account for the money flow," Su said.
The company apparently has a disagreement with the stock regulators. Prior to the stock exchange's decision, David Lu (呂學仁), former chairman of Infodisc who resigned from his post early last week over a huge loss of NT$4.28 billion for the first half of the year, told a press conference that the company has already submitted sufficient information to clarify the bill.
Answering a stock exchange question about why the company wired the money on June 30, before the fund was established on July 19, Lu said it is common sense to put up capital in order to set up a fund. In addition, the company is anticipating a considerable return from the investment, Lu said.
"All our operations are normal and the net value of our shares are still as high as NT$15 per share," Lu said. "We are not another Procomp Informatics Ltd (
Procomp, a chipmaker listed on the TSE, suspended its share trading in late June after it defaulted on a bond payment of NT$2.98 billion. The company, that had also wired money from the Utrecht, Netherlands-based Rabobank to buy funds, will be delisted on Sept. 8, the stock regulators announced in late July.
Problematic deal
"The Taiwan Stock Exchange Corp [TSE] has begun probing the listed companies that have transactions with the foreign bank involved in the problematic deals in both Procomp and Infosick," Kong Jaw-sheng (龔照勝), chairman of the Financial Supervisory Commission, said yesterday.
"I will bring up the issue in the International Conference of Banking Supervisors taking place on Sept. 20 [in Madrid, Spain] for their attention and assistance in passing on the information to the authority governing the branch," Kong said.
In a bid to fill the hole left by the deficit, Infodisc's Lu said the company is disposing of its assets in the US, Germany, South Korea and Taiwan, which are estimated at nearly NT$3.5 billion.
The most urgent task for Infodisc is securing orders from the US, Lu said, adding that its capacity is still 20 million discs per month. In the meantime, Infodisc will look for strategic alliances to maintain the operation, he said. Lu will still be in charge of the company before a new management team is formed.
Battered by the alleged scandal, Infodisc shares tumbled 6.8 percent to close at NT$3.7 on the TSE yesterday.
Prior to the hiccup, Infodisc was a star when it listed on the over-the-counter market in 2000. Shares were once as high as NT$512 per share with earnings per share (EPS) of NT$7.38. But the prosperity did not last after it listed on the TSE in 2001, when the company reported huge losses and saw EPS falling to negative NT$4.23, which dragged the share value down to less than NT$100.
The stock regulators also started their scrutiny of Infodisc's financial reports last year and the issuance of NT$5.7 billion-worth of Euro-Convertible Bonds in 2002 and last year, in a bid to verify if the certified public accountants [Diwan, Ernst & Young (致遠)] and the underwriters need to bear any responsibility, Jerry Huang (黃顯華), a Financial Supervisory Commission member said yesterday.
Apart from Infodisk, the authority has not found other companies in abnormal situations, after checking semi-annual financial reports submitted by the listed companies, Huang said.
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