Four accountants have been punished for negligence in certifying the delisted Procomp Informatics Ltd's (
The Financial Supervisory Commission said punishments may be extended to more accountants and underwriters since the bankrupted chipmaker had manipulated its finances before going public in 1999.
"Procomp was found to have been faking sales figures since 1994 ... which enabled the company to borrow from banks and compile rosy financial reports ... before listing on the main bourse," the commission said in a written press statement released on Sunday, following a five-month investigation.
According to commission vice chairman Lu Daung-yen (呂東英), from 1994 Procomp had falsified trading invoices with several companies that existed only on paper to boost its revenues, even though the company's purchase records showed no activity.
After the company was listed on the Taiwan Stock Exchange in December 1999, top management continued the strategy to maintain the company's growth and raise capital, while opening fake accounts to manipulate the stock, Lu said.
The commission suspects Procomp's top management of having manipulated stocks and insider-trading -- a violation of the Securities and Exchange Law's (
The commission has rendered its finding to prosecutors. A Taipei district court yesterday indicted Sophie Yeh (葉素菲), chairwoman of Procomp, and recommended a jail sentence of 20 years for breach of trust, money laundering and violating the securities law.
Lu gave credit to the ruling, saying that justice has
to prevail.
"It will be a serious warning to other listed
companies if they attempt to manipulate [their
stocks]," he said.
Lu added that Yeh should be held responsible for mismanagement at the company, which embezzled more than NT$10 billion -- representing funds from over 40,000 investors.
The commission will deepen its investigation into Procomp to hold responsible accountants and underwriters found negligent in certifying the company's financial reports before it became a listed company in 1999.
"We will go as deep as the evidence supports," Lu said.
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