Abit on the edge

Taiwanese components vendor Abit is facing financial meltdown as concerns about its financial dealings grow. The company’s shares, traded on the Taiwan Stock Exchange, have been downgraded and the Taiwanese authorities are demanding details of Abit’s transactions over the last 18 months.

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By  Alex Malouf Published  January 3, 2005

Taiwanese components vendor Abit is facing financial meltdown as concerns about its financial dealings grow. The company’s shares, traded on the Taiwan Stock Exchange, have been downgraded and the Taiwanese authorities are demanding details of Abit’s transactions over the last 18 months. Channel concerns about financial irregularities surfaced several weeks ago, when the Taiwan Stock Exchange (TSE) downgraded Abit’s stock. Financial watchdogs explained that the drastic step was taken after a careful review of Abit’s transactions. In one example the TSE gave, there was a US$50m discrepancy between Abit’s own accounts of a US$182m purchase from the Indian-based Kobian Group, and records from the Kobian Group itself. According to a news report from DigiTimes, Abit’s component suppliers are facing financial woes after Abit’s chairman, Remond Lu, said that Abit’s banks may freeze its assets. Abit’s distributors are also looking at forming partnerships with rival vendors. Abit’s stock price has plummeted and the future is bleak for the company. As Abit’s financial situation deteriorates, it is not clear what knock-on effect this will have on the market. Components margins have dipped as low as the actual cost price in recent times, and Abit’s fall could send financially weak second-tier motherboard makers over the edge.

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