Addcn shares drop on allegations of illegal dealings
August 29, 2014, 12:00 am TWN
TAIPEI -- Shares of Addcn Technology Co. (數字科技), one of Taiwan's online trading platform operators, plunged Thursday after several executives of the company were indicted in connection with alleged illegal activities by the company, dealers said.
The allegations against Addcn dampened investor sentiment toward the local online sector, which caused the selling to spread to other online stocks, including gaming companies, dealers said.
Shares of Addcn fell by the maximum daily 7 percent to close at NT$365.50 (US$12.18) with 70,000 shares changing hands. The index on the over-the-counter (OTC) market ended down 0.18 percent at 139.85 points.
Among the other falling online stocks, Soft-World International Corp. lost 1.50 percent to close at NT$98.30, and Cayenne Entertainment Technology Co. shed 2.04 percent to end at NT$86.50.
Addcn shares faced heavy downward pressure soon after the local bourse opened as investors took cues from the New Taipei District Prosecutors Office's decision to charge several executives of the company, and the selling continued until the end of the session, dealers said.
Even after the market closed, investors placed orders to sell 818,000 Addcn shares. In light of the relatively small daily trading volume of the stock, the pending sell orders could send Addcn shares plunging even further, dealers said.
According to prosecutors, Addcn took NT$18.6 billion in funds from the users of 8591.com, which specializes in the trading of virtual products and credits for computer games, between 2009 and February 2013.
Addcn Chairman Liao Shih-fung (廖世芳) and President Wu Tsong-hsien (吳聰賢) were among the executives indicted in the case, prosecutors said.
The online platform operator said it was not involved in any illegal fund-soliciting and is willing to work with the court to offer a better understanding of how the third-party online payment business operates.
The company said that despite the indictments, its day-to-day operations remains normal.