Bloomberg reported that the financial regulator of Taiwan has recommended the launching of the probe on short seller Glaucus Research Group California LLC. The Financial Supervisory Commission claimed that the company allegedly spread false information about Asia Plastic Recycling Holding Ltd and also supposedly did share manipulation.
Spokesman Huang Mou-hsin for the Taipei District Prosecutors Office said today that the request from the regulator was received yesterday, but fell short on providing specifics about the case.
Last month, the news agency noted that the Taipei-listed foam rubber maker rejected the allegations made by Glaucus, who said that the former's financial numbers were overstated by 90%. Because of the Glaucus report about Asia Plastic, the latter's stock has tumbled 27% in the market since April 24.
Criminal lawyer Lai Wenping at law firm Lee and Li said that the Taiwanese prosecutors might probe the veracity of Asia Plastic's financial statements as well as the actions taken by Glaucus before lodging a case against either of the two parties. Moreover, Lai said that the prosecutors could have difficulty in securing access to documents relating to the short seller or to the China-based records of the listed company.
The submission of the case to prosecutors by the commission has been confirmed at a press briefing today by FSC Chief Secretary Tung-liang Lin, Bloomberg said. Last week, FSC minister Tseng Ming-chung said that the commission would be referring Glaucus to prosecutors on suspicion that the firm was guilty of spreading wrong information and had manipulated shares.
On May 5, Glaucus issued an open letter, which said that it was disappointed with the Taiwanese authorities' initial investigation. The letter read. "We fear, based on the investigative process and the hostile stance to our right to discuss our opinions in the public forum, that participants in the Taiwanese market will be deterred in the future from sharing their opinions on a listed company."
