Hong Kong Dragon Peak International Co Ltd (香港龍峰國際), a wholly owned subsidiary of Shanghai Longlife Business Group Co Ltd (上海龍峰企業集團), was yesterday fined NT$4.02 million (US$130,299) by the Financial Supervisory Commission (FSC) for illegally buying and holding an 18.01 percent stake in Tatung Co (大同).
The commission found that Dragon Peak had traded Tatung’s shares from February 2017 to March last year through five securities agencies in Hong Kong, Securities and Futures Bureau Deputy Director Sam Chang (張振山) told a news conference.
The five brokerages are SinoPac Securities (Asia) Ltd (永豐金證券亞洲), a Hong Kong-based brokerage subsidiary of SinoPac Financial Holdings Co (永豐金控); Yuanta Securities (Hong Kong) Co Ltd (元大證券香港); UOB Kay Hian (Hong Kong) Ltd (大華繼顯香港); Pamirs Capital H.K. Ltd (帕米爾思資本香港); and Kim Eng Securities (Hong Kong) Ltd (金英證券香港), Chang said.
Dragon Peak purchased and sold Tatung shares in the name of others, breaching rules governing cross-strait investments as the deals were not authorized, Chang said, adding that the firm still holds 18.01 percent of Tatung’s shares.
The Hong Kong-based firm would face fines of NT$600,000 in accordance with the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (台灣地區與大陸地區人民關係條例) and would be required to liquidate its stake within six months, the commission said.
The firm’s stake in Tatung does not confer any voting rights, it added.
A Dragon Peak representative, who the commission declined to name, would be fined NT$3.42 million for contravening the Securities and Exchange Act (證交法), as they held more than 10 percent of Tatung’s total shares, but failed to report the deals to authorities, it said.
However, it would not fine the five brokerages, as it has not found any evidence that they knew the buyer of the Tatung shares was Dragon Peak, Chang said.
It was the third time that the commission has fined Dragon Peak for illegally buying Tatung shares, Chang said, adding that the commission has continued to monitor the firm and mete out fines.
The commission said that it in May 2017 fined the firm NT$600,000 for holding a 4.06 percent stake and in December that same year levied a NT$5.82 million fine for holding an 8.78 percent stake.
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