FSC to probe al­leged stock fraud in­volv­ing Zodic

The China Post - - LOCAL -

The chair­man of the Fi­nan­cial Su­per­vi­sory Com­mis­sion (FSC,

) said Tues­day that the FSC will launch an in­ves­ti­ga­tion into an al­leged stock trad­ing fraud in­volv­ing biotech firm Zodic Light World Tech­nol­ogy Inc. ( ).

Tseng Ming-chung ( ) made the com­ments af­ter a se­cu­ri­ties trad­ing fraud case sur­faced in the lo­cal media, which re­ported that pros­e­cu­tors have searched Zodic and its sub­sidiary and af­fil­i­ates, while sum­mon­ing 14 peo­ple for ques­tion­ing over the al­leged fraud.

The FSC is the top fi­nan­cial reg­u­la­tor in Tai­wan, su­per­vis­ing trad­ing ac­tiv­ity in the lo­cal fi­nan­cial mar­ket such as eq­uity trad­ing, bank­ing busi­ness and the in­sur­ance sec­tor.

Tseng said the FSC will find out whether Zodic dis­sem­i­nated false in­for­ma­tion about the com­pany in a bid to lure in­vestors into buy­ing its shares and ob­tain large amounts of funds from the public.

Ac­cord­ing to the lo­cal media re­ports, pros­e­cu­tors in Taipei re­ceived a re­port from for­mer Zo­diac em­ploy­ees who said that the Taoyuan-based biotech firm took a large amount of money from in­vestors since it claimed that the com­pany has bright prospects.

While Zodic de­scribed it­self as a min­i­mal in­va­sive ab­dom­i­nal surgery de­vice provider, pros­e­cu­tors found that it is only a shell com­pany and does not own any pro­duc­tion fa­cil­i­ties, ac­cord­ing to the media re­port.

The re­port cited pros­e­cu­tors as say­ing that Zodic Chair­man Lo Hsu-liang ( ) spent only NT$2 mil­lion ( US$64,516) to set up the com­pany in 2011, and bor­rowed money to in­flate the paid-in cap­i­tal to NT$300 mil­lion.

The media re­ports said that Zodic also claims it has part­nered with Chi­rana Group in Europe and has signed a cross-bor­der coop- er­a­tion agree­ment with Honduras.

In Jan­uary 2014, Zodic said it was plan­ning to go public in the lo­cal emerg­ing mar­ket and then sold 10 mil­lion shares through six se­cu­ri­ties ad­vi­sory firms, rak­ing in more than NT$600 mil­lion (US$19.35 mil­lion) in profit. In July 2014, Zodic is­sued an ad­di­tional 13.37 mil­lion new shares to make more than NT$300 mil­lion.

Pros­e­cu­tors ques­tioned Lo’s wife and other 13 re­lated per­sons. All were re­leased on bail rang­ing be­tween NT$30,000 and NT$300,000. But Lo never showed up at the pros­e­cu­tor’s of­fice as he was in Aus­tria.

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