Addcn executives indicted for taking NT$18.6 billion in illegal transactions
By Ted Chen ,The China Post
August 28, 2014, 12:26 am TWN
TAIPEI, Taiwan -- Executives of Addcn Technology Co. (Addcn, 數字科技), an operator of a variety of online trading platforms ranging from cars to houses, were indicted by prosecutors yesterday for allegedly accumulating illegal profits of NT$18.6 billion.
Prosecutors found that the company had been recording immense net cash inflows from the customers of its 8591.com.tw portal that specializes in the trading of virtual goods and credits of computer games.
In addition to Addcn Chairman Liao Shih-fung (廖世芳), the company's former Vice President Wang Chen-yu (王震宇) and President Wu Tsong-hsien (吳聰賢) were also indicted by prosecutors yesterday.
According to prosecutors, the company had been conducting its virtual goods trading business without the approval of the Financial Supervisory Commission (FSC), and have accumulated illegal net capital inflow of NT$18.6 billion since February of 2009.
Prosecutors stated the company's virtual goods trade is in violation of the Act Governing Issuance of Electronic Stored Valued Cards (電子票證發行管理條例), as it had offered credit deposits called “T points” to users of the 8591.com.tw platform, which may be used toward the purchase of virtual goods and gaming credits.
Such a service represents the issuance of electronically stored value cards, which without the approval of the FSC is illegal, said prosecutors.
Following a tip-off, the FSC in 2012 issued an official reprimand that compelled the company to prohibit 8591.com.tw members from purchasing T points without participating in actual transactions of virtual goods. In addition, the company also established an agreement with Cathay United Bank (國泰世華銀行) to have the funds from 8591.com.tw's transactions, security deposits, and distributors' advance cash deposits be managed under a trust account at the bank.
Over the first seven months of this year, Addcn recorded revenues of NT$626 million, improving by 14.39 percent year-on-year. Most notably, the company's July revenues this year reached a record-high NT$100 million, growing by 4.61 percent month-on-month, and 31.35 percent year-on-year following three months of consecutive gains.