The Taipei District Prosecutors’ Office yesterday summoned 14 people for questioning amid a probe into alleged securities fraud at Pharmally International Holding Co, while an international warrant was issued for Pharmally chairman Tony Huang (黃文烈), who reportedly is in Singapore.
Huang allegedly colluded with Chinese businessmen to falsify accounts and financial statements in one of the largest securities fraud cases in recent years involving a Taiwan Stock Exchange (TWSE)-listed firm.
People with shares of Pharmally, which touted itself as a leading pharmaceutical and biotech business, face an estimated NT$1.5 billion (US$50.81 million) in losses with its stock value in tatters.
Prosecutors said that Huang illegally transferred NT$700 million into his personal bank accounts.
Four banks — Entie Commercial Bank, Far Eastern International Bank, Hua Nan Bank and Bank SinoPac — face non-performing loans after lending to Pharmally, investigators said.
A group of three businesspeople, headed by Tsai Shui-ping (蔡水濱), who are involved in real estate and construction in central Taiwan invested heavily in Pharmally face combined losses of NT$2.2 billion, investigators said.
Huang and other Pharmally executives who have left Taiwan face charges for alleged contraventions of the Securities and Exchange Act (證券交易法), stock manipulation, fraud in financial statements and illicit transfers of company assets, prosecutors said.
An international warrant for Huang is valid for 37 years, they said.
Huang has reportedly not been seen in Taiwan since early this month.
Prosecutors said that employees of accounting firm Deloitte & Touche Taiwan allegedly colluded for several years with Pharmally executives to forge reports and financial statements.
In the first round of raids on Monday, Shih Ching-pin (施景彬) and Chiang Ming-nan (江明南), two accountants at Deloitte & Touche Taiwan, were questioned.
They were released on NT$300,000 bail.
Pharmally executives including its chief financial officer, general manager and spokesman, as well as members of the board of directors announced their resignations after the allegations were reported last week, with reports listing most of them as Chinese nationals.
The TWSE on Tuesday suspended trading on Pharmally shares.
Pharmally has production sites in China’s Anhui Province and offices in several Chinese cities.
The firm’s Web site says that its founding Chaoyang Chemical Plant in China in 1997 was restructured as Anhui Chaoyang Pharmaceutical Co.
Huang bought Anhui Chaoyang and set up Pharmally in China in 2013 and gained approval to list on the TWSE in March 2015, the Web site says.
Pharmally in 2016 set up Pharmbac Biological Holding in Singapore and the same year was registered in the Cayman Islands, while in 2017 it established a joint venture with PT Biotis Agrisindo to conduct animal vaccine research and production in Indonesia, the site says.
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