Shares of Asustek hammered by scam probe
CNATAIPEI -- Shares of Asustek Computer Inc., one of Taiwan's leading personal computer vendors, fell sharply Wednesday as the local media reported that prosecutors had launched an investigation into an alleged scam involving the company, dealers said.
October 24, 2013, 12:07 am TWN
After the negative leads surfaced, the stock faced heavy downward pressure upon market opening and fell almost 5 percent to the day's low of NT$213.50 (US$7.26) at one point before rebounding.
By the end of the session, Asustek shares had lost 2 percent to close at NT$220.00 with 5.99 million shares changing hands, while the weighted index on the Taiwan Stock Exchange ended down 0.29 percent at 8,393.62.
According to the Apple Daily report, Asustek had applied environmental protection certification labels used on old models to new products, a way to win more than NT$10 billion-worth of contracts with the government.
The reports said prosecutors suspect that Asustek Vice Chairman Jonathan Tseng is involved in the case and have accused the company of violating the Government Procurement Act to secure large orders.
As Tseng is currently leading an Asustek delegation to Moscow to unveil the company's new products in the Russian market, prosecutors have so far summoned various Asustek representatives for questioning, the report said.
The Environmental Protection Administration said that as Asustek was found to have been using invalid energy-efficient certificates to bid for government contracts in February, it has been barred from filing for new certificates for one year.
In a statement, Asustek accepted that the company has been barred from applying for new certificates between Feb. 6, 2013 and Feb. 5, 2014.
Asustek said the case is not expected to impose any material impact on its operations and shipments.
Market analysts said the report dealt another blow to the company at a time when global PC demand remains weak, adding that shares of Asustek are expected to face further downward pressure amid continuing weak sentiment.
According to Digitimes Research, global notebook computer shipments for the fourth quarter are expected to fall 3.2 percent from the third quarter and to drop 13.4 percent from a year earlier.