Flavor Full raided over alleged trading misconduct
By Lauly Li , The China Post
December 5, 2013, 12:24 am TWN
TAIPEI, Taiwan -- Prosecutors yesterday searched Flavor Full Foods (Flavor Full, 富味鄉) over allegations the company violated the Securities and Exchange Act, and summoned 27 persons of interest, including the company's chairman Chen Wen-nan (陳文南), for questioning.
Authorities accused Flavor Full of violating the Securities and Exchange Act by disseminating false information to the public, and therefore searched the firm's office located in Wugu District, New Taipei City. The 27 people were escorted to the New Taipei District Prosecutors Office.
The raid is only the latest in a string of woes for the scandal-beset Flavor Full Foods, a domestic oil producer. In October, the company was discovered to have been selling 24 adulterated oil products, adding cottonseed oil to the blend while claiming the products were mixed with peanut oil, corn oil and chili oil.
The company subsequently held a press conference and claimed the products mixed with cottonseed oil products were all exported goods and were not available in Taiwan; however, those products were later found to be available on the domestic market.
Flavor Full Foods was subsequently fined NT$8 million by the New Taipei Department of Health (DOH) for violating the Act Governing Food Sanitation.
On Nov. 20, the Financial Supervisory Commission (FSC) confirmed that an insider-trading case also involved three Taiwan-listed food companies — Flavor Full Foods, Wei Chuan Foods Corp. (味全食品), and Formosa Oilseed Processing Co. (FOPCO,福懋油).
The FSC targeted the companies embroiled in the food safety and mislabeling scandals, and launched an investigation into the aforementioned firms' irregular trading of shares.
The FSC said it saw a surge of short-sell orders prior to negative leads about the three companies' food safety scandals appearing on the Taiwan stock market.
Flavor Full Allegedly Adulterated Sesame Oil
The New Taipei DOH yesterday said that Flavor Full had allegedly added yellow sesame oil into products it claimed contained “pure” black sesame oil. The DOH noted that it has transferred the case to the Changhua District Prosecutors Office for investigation.
The DOH said it was investigating the firm's import and export ingredients, and had discovered that Flavor Full may have adulterated four of its sesame oil goods.
While investigators searched Flavor Full Foods' office yesterday morning Chen, the company's chairman, announced news of the raid on Taiwan's Market Observation Post System, and said the firm would cooperate with investigators.
Chen was indicted by Changhua prosecutors on Oct. 31 on charges of fraud and violations of the Act Governing Food Sanitation.