Taiwan stock regulators asked KPMG LLP (安侯建業) to explain its audit of a company in which investors lost all their money after it persuaded them to fund a flat-panel display factory that was never built.
KPMG will "bear the obligation" to show it properly audited Sinovision Technology Corp (華象科技), which sold NT$4 billion (US$116 million) of shares to more than 2,000 investors between 1998 and last year, said Lee Chi-hsien, who heads the Securities and Futures Commission (SFC) investigation.
Sinovision never built the factory and never traded its shares on the Taiwan Stock Exchange, as it had promised to do. Its chairman, Lee Yi-shih (李逸士), allegedly took off to Canada last year and board director Liu Kai-chi (劉凱齊), another suspect in the scam, is believed to be in China.
KPMG, which audited Sinovi-sion's 2000 accounts, denied any impropriety.
"We have never falsified any document related to Sinovision's accounts," it said in a statement.
The accounting firm issued a report on the accounts in April last year in which it expressed "reservations" about NT$232 million of accounts receivable. Those represented 22 percent of Sinovision's NT$1.05 billion of assets, KPMG said then.
The Securities and Futures Commission last year asked Sinovision to support its share-sale plans by submitting additional documents such as patents.
Sinovision pledged Lee Yi-shih's personal stake in the company to the commission to guarantee the value of the accounts receivable so that KPMG could issue a final audit report without reservation, KPMG said.
The company's shares were traded privately through brokers and agents. Sinovision's Lee lured investors by citing local media reports that cast the company in a favorable light.
The local Chinese-language Economic Daily News in March 2000 described Sinovision's products as "revolutionary," and the local Chinese-language Commercial Times said in February last year that the company had built a flat-panel display plant and forecast sales of NT$1 billion that year.
The company's share price rose to as high as NT$80 per share on the unlisted market on the face value of NT$10 per share -- without the company producing a single LCD panel.
Meanwhile, SFC officials said investors buying unlisted company shares on the gray market should be well aware of the risks involved.
The story first broke in the Chinese-language media on Thursday when DPP Legislator Chen Chin-chun (
Chen accused the company of creating false publicity in the local business media and associating itself with major industry leaders to add legitimacy to the company.
He also lashed out at the SFC for failing to prevent the scam.
‘ABUSE OF POWER’: Lee Chun-yi allegedly used a Control Yuan vehicle to transport his dog to a pet grooming salon and take his wife to restaurants, media reports said Control Yuan Secretary-General Lee Chun-yi (李俊俋) resigned on Sunday night, admitting that he had misused a government vehicle, as reported by the media. Control Yuan Vice President Lee Hung-chun (李鴻鈞) yesterday apologized to the public over the issue. The watchdog body would follow up on similar accusations made by the Chinese Nationalist Party (KMT) and would investigate the alleged misuse of government vehicles by three other Control Yuan members: Su Li-chiung (蘇麗瓊), Lin Yu-jung (林郁容) and Wang Jung-chang (王榮璋), Lee Hung-chun said. Lee Chun-yi in a statement apologized for using a Control Yuan vehicle to transport his dog to a
Taiwan yesterday denied Chinese allegations that its military was behind a cyberattack on a technology company in Guangzhou, after city authorities issued warrants for 20 suspects. The Guangzhou Municipal Public Security Bureau earlier yesterday issued warrants for 20 people it identified as members of the Information, Communications and Electronic Force Command (ICEFCOM). The bureau alleged they were behind a May 20 cyberattack targeting the backend system of a self-service facility at the company. “ICEFCOM, under Taiwan’s ruling Democratic Progressive Party, directed the illegal attack,” the warrant says. The bureau placed a bounty of 10,000 yuan (US$1,392) on each of the 20 people named in
The High Court yesterday found a New Taipei City woman guilty of charges related to helping Beijing secure surrender agreements from military service members. Lee Huei-hsin (李慧馨) was sentenced to six years and eight months in prison for breaching the National Security Act (國家安全法), making illegal compacts with government employees and bribery, the court said. The verdict is final. Lee, the manager of a temple in the city’s Lujhou District (蘆洲), was accused of arranging for eight service members to make surrender pledges to the Chinese People’s Liberation Army in exchange for money, the court said. The pledges, which required them to provide identification
INDO-PACIFIC REGION: Royal Navy ships exercise the right of freedom of navigation, including in the Taiwan Strait and South China Sea, the UK’s Tony Radakin told a summit Freedom of navigation in the Indo-Pacific region is as important as it is in the English Channel, British Chief of the Defence Staff Admiral Tony Radakin said at a summit in Singapore on Saturday. The remark came as the British Royal Navy’s flagship aircraft carrier, the HMS Prince of Wales, is on an eight-month deployment to the Indo-Pacific region as head of an international carrier strike group. “Upholding the UN Convention on the Law of the Sea, and with it, the principles of the freedom of navigation, in this part of the world matters to us just as it matters in the
RSS