Tatung Co (大同) has urged the government to fix legal loopholes after a Hong Kong company was caught by the Financial Supervisory Commission (FSC) purchasing its shares illegally three times in two years.
“Other Taiwanese companies face similar situations to ours. There must be loopholes in the law that China can take advantage of, which is why they continue to breach Taiwan’s laws and regulations, even after repeated penalties,” Tatung said in a statement on Friday.
“There must be coerced acts by parties in China and Taiwan — they are not simple cases of investment by China,” Tatung said.
The company’s remarks came after the commission on Thursday said that Hong Kong Dragon Peak International Co Ltd (香港龍峰國際) would be fined NT$4.02 million (US$130,299) for illegally purchasing an 18.01 percent stake in Tatung through five Hong Kong brokerages.
The Hong Kong firm, a wholly owned subsidiary of Shanghai Longlife Business Group Co Ltd (上海龍峰企業集團), was fined NT$600,000 in May 2017 for holding a 4.06 percent stake in Tatung and was again fined NT$5.82 million in December that same year for purchasing an 8.78 percent stake in the company.
Tatung said that the commission and the Mainland Affairs Council (MAC) can require illegal Chinese investors to report parties they sell to after being requested to liquidate the stocks.
“We do hope that after this third penalty, the authorities can enforce the law, find out who transferred the stocks in the three penalty cases and request both sellers and buyers to report and register as stipulated by the law,” Tatung said.
The authorities should also impose penalties on financial institutions that have failed to thoroughly follow know-your-customer or customer due diligence measures, have been involved in contraventions of the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (台灣地區與大陸地區人民關係條例) or have faced allegations of money laundering as co-offenders.
“Chinese investors would not be able to hide their illegal profits without the support of some security brokerages and custodian banks. We hope the FSC can exercise control over the aforementioned financial institutions, to establish a sound and healthy capital market and financial system in Taiwan,” Tatung said.
The Dragon Peak case has raised questions about the effectiveness of the authorities’ preventive measures and controls, National Chengchi University finance professor Chu Hau-min (朱浩民) said on Friday, adding that while the government could raise the maximum fine from NT$600,000 to NT$25 million after revising the act, such penalties would be unlikely to scare away a potential culprit.
The FSC should also place the burden of responsibility on securities brokerages, requiring them to conduct thorough checks on overseas buyers of Taiwanese shares or face stiff punishment, Chu said.
The commission did not punish the five brokerages that helped Dragon Peak buy Tatung shares. They were: SinoPac Securities (Asia) Ltd (永豐金證券亞洲), Yuanta Securities (Hong Kong) Co Ltd (元大證券香港), UOB Kay Hian (Hong Kong) Ltd (大華繼顯香港), Pamirs Capital H.K. Ltd (帕米爾思資本香港) and Kim Eng Securities (Hong Kong) Ltd (金英證券香港).
“I was really surprised by the news, as the brokers should also take some responsibility,” Chu said. “There are many tools the FSC and the Taiwan Stock Exchange [TWSE] can use to punish brokerages for failing to stop Chinese funds from illegally buying Taiwanese shares.”
Meanwhile, the TWSE could act to suspend the brokerages’ operations for up to six months and the commission could ask for a five-year suspension if they are found not to have conducted know-your-customer measures properly, one TWSE manager said on Friday, on condition of anonymity.
“In a serious situation, the TWSE could ask brokerages to terminate their business entirely, but that would substantially affect their clients, so the exchange seldom takes such actions unless the problem is really severe,” the manager said.
SinoPac Securities Ltd (永豐金證券) said it had improved its know-your-customer measures after it was fined for buying Tatung shares for Hong Kong Dragon Peak in 2017, while Yuanta Securities Co Ltd (元大證券) declined to comment.
The other three brokers could not be reached for comment.
“Our investigation on brokerages is still ongoing and if we find enough evidence showing they were in the wrong, we will punish them,” Securities and Futures Bureau Deputy Director Sam Chang (張振山) said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”