Breaking News, World News and Taiwan News.

FSC probing Asia Plastic Recycling after negative research

TAIPEI--The Financial Supervisory Commission (FSC) has launched an investigation into Asia Plastic Recycling Holding Ltd. after a recent research report accused the overseas incorporated company of falsifying its financial records.

Asia Plastic Recycling, incorporated in the Cayman Islands, recycles used plastic bags and waste scraps to produce foam rubber products in China.

Tseng Ming-chung, chairman of the FSC, said the commission has also kicked off a probe into whether U.S.-based Claucus Research Group, which issued the research note, was involved in manipulation of Asia Plastic Recycling's share price.

Tseng said that if any irregularities are found in the investigation, the FSC, Taiwan's top financial watchdog, will report the company to prosecutors.

Since the Claucus report surfaced on the local media April 24, shares of Asia Plastic have taken a beating. On April 25, the stock fell 7 percent, the maximum daily decline, to close at NT$74.90 (US$2.47) on the Taiwan Stock Exchange (TWSE).

In the research report, Claucus said Asia Plastic Recycling overstated its financial data, adding that the company's actual earnings were about 90 percent less than it reported to the TWSE.

The research institution has urged investors to sell Asia Plastic Recycling shares and put the value of the stock at NT$0.

Asia Plastic Recycling is one of 37 foreign-registered companies that have launched primary listings on the main board.

Although the company strongly denied Claucus's accusation, the stock still faced heavy selling, with downward pressure even spreading to other foreign incorporated stocks.

Market analysts said the Claucus report has hurt investor confidence in foreign incorporated stocks listed on the local bourse and investors simply dumped their stocks amid fears over further negative leads to follow.

Michael Lin, president of the TWSE, said that while Asia Plastic Recycling has presented figures to deny Claucus's research report, the company will work with accountants to further clarify its financial condition.

Lin said the TWSE will make a judgment about the gap between Asia Plasic Recycling's financial data and the Claucus report after it obtains more information about the issue.

Lin said the exchange already tightly monitors listed companies' financial data, and for foreign incorporated companies, in particular, the supervision has been even tighter in a bid to protect investors.

According the filing to the TWSE, Asia Plastic Recycling, which launched a primary listing on the main board in August 2011, posted NT$6.44 in earnings per share (EPS) in 2013, compared with NT$8.03 in EPS recorded in 2012.

Write a Comment
CAPTCHA Code Image
Type in image code
Change the code
 Receive China Post promos
 Respond to this email
WSJA
Subscribe  |   Advertise  |   RSS Feed  |   About Us  |   Career  |   Contact Us
Sitemap  |   Top Stories  |   Taiwan  |   China  |   Business  |   Asia  |   World  |   Sports  |   Life  |   Arts & Leisure  |   Health  |   Editorial  |   Commentary
Travel  |   Movies  |   TV Listings  |   Classifieds  |   Bookstore  |   Getting Around  |   Weather  |   Guide Post  |   Student Post  |   English Courses  |   Terms of Use  |   Sitemap
  chinapost search