The Taiwan Stock Exchange (TWSE) is monitoring 12 companies that for years have reported sluggish earnings or performed weakly, ahead of new delisting requirements to take effect in April, TWSE Chairman Hsu Jan-yau (許璋瑤) told lawmakers yesterday.
Under those rules, a company that has a net value per share less than NT$3 or whose ability to continue operations has been questioned by certified public accountants would be required to improve within three-and-a-half years, or face being delisted from the main bourse, Hsu told members of the legislature’s Finance Committee.
Hsu declined to name the 12 firms, saying only that their combined market value was NT$10.6 billion (US$347.5 million), accounting for 0.03 percent of the market value of all listed firms, which is NT$35 trillion.
Photo: Wang Meng-lun, Taipei Times
If the 12 fail to improve their financial situation within three years, the exchange would halt the trading of their shares, but give them six more months to see if they can turn things around before moving to delist them, he said.
That means the soonest any of the 12 would be dislisted would be in 2023.
The exchange would review the financial statements of the 12 in March, Hsu told lawmakers.
Democratic Progressive Party Legislator Karen Yu (余宛如) told Hsu and other officials at the meeting that the three-and-a-half-year period is too long, given that exchanges in the US have an improvement period of 90 days, while Hong Kong has 18 months.
Such a long period of time would allow fabricated information to spread and provide time to manipulate share prices, while making it difficult for regulators to confirm if the companies are really making improvements, she said.
Financial Supervisory Commission Chairman Wellington Koo (顧立雄) told Yu that investors in financially stressed companies could be hurt if the TWSE just delisted them without advance warning.
The TWSE would examine the companies thoroughly to determine if they could be moved off the exchange’s monitoring list, he said.
According to the TWSE’s Web site, the exchange has taken a more cautious trading approach for the shares whose net value per share has dropped below NT$3, matching price quotations once every 30 minutes compared with the usual once every 5 seconds, or the company’s financial health has been questioned by certified public accountants.
These stocks include Sumagh High Tech Corp (本盟光電), Jui Li Enterprise Co (瑞利企業), Chien Shing Stainless Steel Co (千興不銹鋼), Tecom Co (東訊), Twinhead International Corp (倫飛電腦), Powercom Co (科風), JunTai International Co Ltd (鈞泰), Aiptek International Inc (天瀚科技), Arima Optoelectronics Corp (華上), Tong-hwa Synthetic Fiber Co Ltd (東華), Optimax Technology Corp (力特光電), Cheng Mei Materials Technology Corp (誠美材料) and Sandmartin International Holdings Ltd (聖馬丁).
Hsu also told the committee that the stock exchange expects average daily turnover to decline from NT$125 billion this year to NT$120 billion next year.
Turnover has slowed over the past two years and the local economy still faces uncertainties, TWSE spokeswoman Rebecca Chen (陳麗卿) said later by telephone.
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