NEW YORK, Nov. 17 -- Asia Pacific Wire & Cable Corp. Ltd. (APWC), a manufacturer of wire and cable products for the telecommunications and power industries, announced today that top managers at one of its subsidiaries in China have been fired for financial misconduct. The company also said it has relocated its corporate headquarters from Singapore to Taipei and four of its board members have resigned.
APWC says that an internal investigation and an independent investigator found financial misconduct on the part of top managers, including the chairman and general manager, at one of its subsidiaries in China, Ningbo Pacific Cable Co. Ltd. The company found that, although it couldn't put a monetary figure on the losses, the lack of supervision over financial and accounting practices by its former managers was a material factor in losses incurred at Ningbo over the past four years.
Last summer, APWC announced it wouldn't meet the US Securities and Exchange Commission June 30 deadline for filing its annual report for the fiscal year ending Dec. 31, 2004, because of the investigation, which was looking into unauthorized payments made from APWC and some its subsidiaries to several of its former directors and officers and some intercompany loans made between APWC and some of its subsidiaries and affiliates.
According to APWC, it fired those responsible and has appointed a new chairman and acting general manager at Ningbo. The company said it will continue to make changes at the subsidiary, and, based on the results of the investigation, is looking into the actions of present and former officers and directors at some of its other subsidiaries. APWC's board and managers are also working with an independent consultant to fix weaknesses in internal controls over financial reporting and establish an internal audit department at the company's headquarters which would oversee operating and financial audits.
APWC said it is working with its auditors, Ernst & Young, to complete a review of the fiscal year, which it hopes will be completed in the next several weeks and will resolve some of its remaining questions.
APWC also announced today that it was moving its headquarters to Taipei because Pacific Electric Wire & Cable Corp. (PEWC), which is headquartered in Taipei, has reacquired majority control of the company and provides it with materials and services. Also, APWC said, the move will allow it to better manage business in China. The company's manufacturing facilities in Singapore were not moved.
Also, the company said four members have resigned from APWC's board. Andy Cheng, Jack Sun and David Sun (each of whom are affiliated with PEWC) have resigned to increase the number of independent directors on the APWC board to five. In addition, Ulyos Maa, chief executive officer of KPMG ( Taiwan) who served as an independent director, resigned to devote more time to his business.
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