FSC to probe alleged stock fraud involving Zodic
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.