Procomp Informatic: Stepping on Ethical Landmines in Asia

Procomp Informatic: Stepping on Ethical Landmines in Asia

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In 2004, the collapse of Procomp Informatics Ltd., a major Taiwanese chip maker in the high-tech world, was regarded by Taiwan’s market watchdogs as similar to the scandal of the giant US energy company Enron in 2001. Procomp defaulted on a bond payment and filed for bankruptcy despite a huge cash balance recorded in its books. It was discovered that the company’s chairwoman together with its executives and overseas sales agents had colluded in overstating sales revenue, manipulating stock prices, illegally leveraging assets and arranging bonds through fictitious companies. This incident left thousands of company shareholders with massive financial losses. The case has raised further concerns about corporate governance and risk management of public companies in Taiwan. It has spotlighted the need for credibility of ...

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