The collapse of Procomp Informatics Ltd, the main Taiwanese chipmaker, has been hailed Taiwan's market watchdogs like the scandal of U.S. energy giant Enron in 2001. In June 2004, Procomp defaulted on payment of bonds and structured bankruptcy, despite the huge cash balance recorded in their books. It was found that the leaders of the company and its foreign sales agents was a conspiracy of overstating revenues, manipulation of stock prices, illegally using the assets as well as the organization of communication through the paper company. The incident left thousands of shareholders with massive financial losses. Raises concerns about corporate governance and risk management in public companies in Taiwan, and questions the credibility of the financial reporting process, internal control of companies and corporate ethics in the Asian context. "Hide
by Claudia HL Woo, Amy Lau Source: University of Hong Kong, 18 pages. Publication Date: March 13, 2007. Prod. #: HKU646-PDF-ENG
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