The China Post staff
One tenth of the nearly 200 local companies that had chosen to ditch or put on hold their pre-listing consultation plans over the past year did not give a public explanation, according to the island’s stock market regulator.
According to the Securities and Futures Commission, 191 local companies opted to drop or suspend the consultation from July 2001 to August this year, but one tenth of them simply did not give a reason or just vaguely explained why they changed their mind.
Under Taiwan’s rules, any companies desiring to go public on the mainboard market must undergo more than one and a half years of consultation. The companies will have to appoint a securities firm to advise them on the listing.
But the companies can also choose to temporarily suspend or to drop the consultation during this period if there are any special reasons.
In the first eight months of this year, 121 local firms said they want to suspend their mainboard-listing consultation plans, while 70 others decided to cancel theirs, according to the SFC, the China Times Express reported.
According to the SFC, over the past year, 50 of the 191 companies halted or dropped their plan to list on the mainboard because they chose to list on the over-the-counter market instead. Of the remaining 140 or so companies, some said they needed to alter the consultation plan because they had merged with other companies or they wanted to change the consulting brokerage; the others cited “changes of operation strategies,” “business concerns,” “changes of internal operations” or “bad economy” as their reasons, which basically did not tell anything.
The worse was, around 20 companies simply did not give an explanation, the SFC said.
The SFC statistics were reported after a top executive of a local company was accused of swindling NT$4 million from more than 2,000 investors.
Lee Yi-shih, the top executive of Sinovision Technology Corp., was accused of making false claims about his knowledge regarding liquid crystal display panels and forging false corporate book accounts.
Sinovision halted listing consultation but has continued to trade on the unofficial stock market.
Investing in stocks trading on the unofficial market carries higher risks than buying those listed on the OTC or the mainboard because these stocks are under less supervision.
SFC officials said they will investigate if Sinovision’s underwriter and accountants are conspiring in the swindling case.