Phison Electronics Corp (群聯) is not ruling out the possibility of a shares buyback scheme if investors react irrationally in the stock market this week or if it feels it needs to prevent a possible hostile takeover, chairman Pua Khein-seng (潘健成) said yesterday.
“The company is set to convene a board meeting on Thursday to discuss relevant issues,” Pua told a news conference at the Taipei Exchange, which exchange authorities had requested the firm hold.
That meeting followed a search by Hsinchu District prosecutors on Friday of the integrated-circuit module maker’s headquarters in Miaoli County’s Jhunan Township (竹南) in connection with allegations of violations of the Securities Exchange Act (證券交易法).
Photo: Taipei Times
Pua and other persons of interest were questioned by the Hsinchu District Prosecutors’ Office over allegations of embezzlement of funds through transactions between Phison and its subsidiaries and filing inaccurate corporate financial statements between 2009 and 2014, Chinese-language media said.
Pua said the search on Friday had been triggered by the company “crossing the red line” and violating regulations, and he promised not shirk responsibility in facing up to the issue.
However, he did not say what the “red line” was, only that he could not disclose too many details because the case is under investigation.
Phison profits were real, as were transactions between Phison and its subsidiaries — Ostek Corp (曜成科技) and Memoryexchange Corp (華威達科技), he said, adding that the goods and payable items of the transactions all had been received and paid.
Pua denied making “ill-gotten gains.”
The transactions had not hurt Phison’s interests or that of its shareholders, and the firm would provide details of the transactions to investigators, he said, adding that Phison has more than NT$10 billion (US$316.8 million) in cash.
However, if the price of Phison’s shares plunge significantly this week, thereby increasing the possibility of a hostile takeover, the firm might carry out a share buyback program to secure its own interests and those of its shareholders, the company said.
The investigation would not affect Phison’s operations, as the relationships between Phison and its clients are long-term collaborations, Pua said.
He said that Phison’s clients, strategic partners and suppliers have expressed their faith in it.
Pua said he is optimistic about the demand for NAND flash technology in the market this quarter, but that the increase in average selling price might slightly affect the company’s orders during the July-to-September period.
The supply and demand for NAND flash is to become even healthier next quarter, benefiting Phison’s performance in the remaining of this year, Pua said.
After questioning by prosecutors, Pua on Saturday was freed on NT$20 million bail and banned from leaving the country.
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