Procomp Informatics Ltd, which used to be known as the king of the stock market, has filed a restructuring request with the Shihlin District Court. No one knows what has happened to NT$6.3 billion in cash that was on the company's books, and the firm's chairwoman, Yeh Su-fei (
In little more than a week, Procomp shares owned by nearly 40,000 investors were turned into so much waste paper, and several bank creditors have been left with huge bad loans. The Procomp scandal is almost a Taiwanese version of the Enron case.
Procomp has provided many negative examples of corporate governance from which we can learn. It neglected its core business; it paid excessive attention to manipulating its financial leverage; it overstated accounts receivable and frequently raised huge amounts of capital; it traded in derivatives through foreign banks using company cash funds without previous announcement; and it frequently changed its chief financial officers and accountants.
Is Procomp alone in behaving like this? We worry that this is just the tip of the iceberg, because judging by the transparency of domestic corporations' internal financial affairs, almost no company passes the corporate governance test.
This incident has proved a serious test for the external audit mechanisms meant to provide certification of a company's financial affairs. Procomp investors and CitiBank, the underwriter of Procomp's overseas depository receipts, invested in Procomp on the strength of the accountants' certified audit report that Procomp had NT$6.3 billion. Now these funds have disappeared. Is the reason that the audit was fraudulent, or were the accountants also victims? Over the past six months, Procomp has not only frequently changed accountants, it has also changed accounting firms. The last accountants to take over responsibility for certifying the company's financial reports completed the assessment in only seven working days. Shouldn't this make us suspicious? If financial reports already certified by accountants remain problematic, how can anyone trust the financial reports of Taiwan's listed and OTC companies?
The Procomp case highlights the helplessness of supervisory agencies in the face of this kind of scandal. The Securities and Futures Commission (SFC) and the Taiwan Stock Exchange can only demand that Procomp make a formal report and terminate trading in the company's shares. If nothing can be discovered through this process, then the case is passed to the courts. There is no possibility of warning the public before such a case, and after the case has emerged there is still no way of demanding that Procomp reveal the location of the missing funds. Investors, creditors and banks have no way of recouping their losses. Even now, as investigative agencies begin the judicial process, what are the chances that justice will be the result? Even if we do not consider Yeh's political and financial connections, if billions of dollars already have been sucked out of the company, what are the chances that a remedy will be found?
Of the many companies traded on the stock exchange and the OTC market, just one company has been delisted. The savings of tens of thousands of investors are gone because they trusted industry information, accountants' guarantees and the government's supervisory and management functions. But which of these is going to protect innocent investors?
The Financial Supervisory Commission, which will include the securities, futures and money markets in its purview, started its operations on the first of this month. We hope that this agency will use the Procomp and Enron cases as a guide for reviewing business administration in Taiwan and will seek to establish transparency in the financial transactions of listed companies.
A Chinese diplomat’s violent threat against Japanese Prime Minister Sanae Takaichi following her remarks on defending Taiwan marks a dangerous escalation in East Asian tensions, revealing Beijing’s growing intolerance for dissent and the fragility of regional diplomacy. Chinese Consul General in Osaka Xue Jian (薛劍) on Saturday posted a chilling message on X: “the dirty neck that sticks itself in must be cut off,” in reference to Takaichi’s remark to Japanese lawmakers that an attack on Taiwan could threaten Japan’s survival. The post, which was later deleted, was not an isolated outburst. Xue has also amplified other incendiary messages, including one suggesting
Chinese Consul General in Osaka Xue Jian (薛劍) on Saturday last week shared a news article on social media about Japanese Prime Minister Sanae Takaichi’s remarks on Taiwan, adding that “the dirty neck that sticks itself in must be cut off.” The previous day in the Japanese House of Representatives, Takaichi said that a Chinese attack on Taiwan could constitute “a situation threatening Japan’s survival,” a reference to a legal legal term introduced in 2015 that allows the prime minister to deploy the Japan Self-Defense Forces. The violent nature of Xue’s comments is notable in that it came from a diplomat,
Before 1945, the most widely spoken language in Taiwan was Tai-gi (also known as Taiwanese, Taiwanese Hokkien or Hoklo). However, due to almost a century of language repression policies, many Taiwanese believe that Tai-gi is at risk of disappearing. To understand this crisis, I interviewed academics and activists about Taiwan’s history of language repression, the major challenges of revitalizing Tai-gi and their policy recommendations. Although Taiwanese were pressured to speak Japanese when Taiwan became a Japanese colony in 1895, most managed to keep their heritage languages alive in their homes. However, starting in 1949, when the Chinese Nationalist Party (KMT) enacted martial law
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