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Investors sell off shares in AU Optronics after price-fixing fine report

TAIPEI -- Shares of AU Optronics Corp. (AUO), one of Taiwan's leading flat panel makers, encountered sell-offs yesterday in the wake of U.S. media reports that the Taiwanese firm could face a US$1 billion (NT$29.6 billion) fine for price fixing, dealers said.

Fears have escalated that the heavy fine will further squeeze AUO's bottom line at a time when Taiwan's major flat panel suppliers are struggling to turn a profit during the current down cycle, the dealers said.

At the end of trade, shares of AUO closed down 4.42 percent to NT$10.8, with 254.68 million shares changing hands. The weighted index closed up 8.35 points to 7,578.8.

“The huge fine report appears very frightening to many investors, who rushed to dump AUO shares soon after the local bourse opened,” MasterLink Securities analyst Tom Tang said.

Tang said that if the court accepts the prosecutors' recommendation, the fine is likely to extend AUO's losses for 2012 by around NT$3 per share.

MasterLink Securities has forecast that the flat panel maker will incur NT$4.55 in loss per share this year after it posted NT$2.93 in loss per share for the first half of the year.

In a statement filed to the Taiwan Stock Exchange, AUO said the fine recommended by the U.S. attorneys has been calculated based on inaccurate and exaggerated market information and analysis.

AUO said the company has provided and will keep providing accurate market information and analysis to the court in a bid to get an appropriate financial penalty.

AUO was charged by the U.S. government in June 2010 with participating in a conspiracy to fix prices of flat panels between 2001 and 2006.

In March, AUO, its vice chairman Chen Hsuan-bin and former vice president Hsiung Hui, were found guilty of their roles in the price-fixing case.

“The court has not issued a ruling on the case. The selling in AUO shares simply was a knee-jerk reaction to the US$1 billion fine report,” Tang said.

“Fortunately, some investors appeared willing to take advantage of AUO's current low valuation, helping the stock to recoup some of its early losses,” he went on, referring to AUO's low book value to price ratio

Tang said it seemed that AUO shares had some technical support, as they moved to an early low of NT$10.55.

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