OBI Pharma Inc (台灣浩鼎) shares yesterday fell by more than 4 percent, worse than the 0.95 percent decline on the over-the-counter market, as investors reacted negatively to new allegations about a conflict of interest in the company’s shareholding.
The stock closed at NT$415.50 on the Taipei Exchange, down from the previous day’s NT$433. Since the beginning of this year, the drug developer’s shares have dropped 36.56 percent, while the TPEX has increased 1.48 percent over the same period.
The Chinese-language Next Magazine yesterday reported that the daughter of Academia Sinica President Wong Chi-huey (翁啟惠) bought about 3 million shares of OBI Pharma in 2012.
The report said that Wong Yu-shioh (翁郁琇) bought the OBI shares at a relatively low price of NT$31 per share, potentially allowing her to reap billions of New Taiwan dollars in profit.
Academia Sinica, the nation’s leading research academy, works in close collaboration with OBI Pharma. When the company last month released discouraging results on the second and third-phase clinical trials of a new breast cancer drug, OBI-822, Wong Chi-huey voiced his support for the drug, saying that the flawed design of the clinical trial was to blame for the failure.
As a close collaborator of the company and a government official, Wong Chi-huey’s positive comments about OBI-822 have raised eyebrows.
At the legislature’s Finance Committee meeting yesterday, Chinese Nationalist Party (KMT) Legislator-at-large William Tseng (曾銘宗) raised the issue and demanded that the financial regulator take action on the matter.
“If his daughter is confirmed to have received the 3 million shares from Ruentex Group (潤泰集團), Wong Chi-huey cannot just walk away,” Tseng said, referring to the magazine report.
Ruentex Group is one of OBI Pharma’s major shareholders.
According to the latest data from the Taiwan Stock Exchange, as of June 24, 2014, Wong Yu-shioh held 1.93 million shares, or 1.29 percent, of OBI Pharma stock.
Earlier this month, Tseng urged the Financial Supervisory Commission to determine if Wong Chi-huey had violated the Securities and Exchange Act (證券交易法) by speaking on behalf of OBI Pharma.
Financial Supervisory Commission Chairwoman Jennifer Wang (王儷玲) told the committee meeting that based on an internal investigation, the commission had found that there were concerns over the matter.
“We have forwarded all related materials in our hands to prosecutors for further investigation,” Wang said.
OBI Pharma chairman Michael Chang (張念慈) later in the day issued a statement saying that information about all major shareholders were already made public before the company started trading on the smaller Emerging Stock Market in 2012.
In the statement, Chang said that Wong Yu-shioh was one of the major shareholders of US-based Optimer Pharmaceuticals Inc, the parent company of OBI Pharma at the time, and she bought the shares before its Emerging Stock Market debut in 2012.
Chang also voiced his support for Wong Chi-huey, saying that previous remarks made by the scientist should not be taken as signs of stock market manipulation.
Chinese-language monthly Wealth Magazine executive director Hsieh Chin-ho (謝金河) yesterday questioned Wong Chi-huey’s role in the company.
“Some people might find president Wong being so positive [on the company] is likely due to the massive interests behind,” Hsieh wrote on Facebook.
Media personality Clara Chou (周玉蔻) said that the ongoing affair is destroying Wong’s reputation and would further harm the prospects of Taiwan’s biotech industry.
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