Brocker Technology says it has cancelled an agreement with the Littauer Group to purchase 25 per cent of the outstanding shares of Littauer Technologies, a Korean public company that trades on Kosdaq, the Korean stock exchange.
Last December, Brocker announced it had entered into a memorandum of understanding with Littauer to acquire a 25 per cent controlling interest in that company. Under the complex share-swap merger, the deal was set to make Littauer chair, Charles Spackman, the majority shareholder of the resulting company.
Brocker's Auckland-based spokesperson, Nigel Murphy, says the memorandum of understanding was subject to a number of conditions, including completion of due diligence reviews and board and shareholder approval - none of conditions have been satisfied to date.
"Brocker has decided it will not be proceeding with this transaction," says Murphy.
In February, Littauer declined to discuss the fate of the deal when New Zeland Reseller News contacted its executives in Singapore following the revelation of financial irregularities with Brocker's Australian subsidiary.
In a related development, The Korea Times reported on March 25 the arrest of Littauer Technologies' director, which is feared to deal a serious blow to the already shattered Kosdaq market.
According to the report, Huh Rock, former representative director of the company, was arrested on charges of pooling funds from investors illegally through Asianet, a paper company based in tax-haven Burmuda, and embezzling money. The prosecution is also investigating suspicions of stock price manipulation by Littauer.
Huh was suspected of embazzling 19.6 billion won that he collected from 116 investors in the company without due procedures, including the lack of report to the Financial Supervisory (FSS). In the process, brokerage house officials allegedly received one billion won worth of Littauer stocks from Huh.
Littauer was formerly named Power-Tech and produced parts and supplies for ventilators and boilers. As Littauer Strategics of the United States took over Power Tech (listed on the Kosdaq market) in February last year, the boiler parts maker was transformed into an internet holding company.
Brocker's Murphy says this latest development didn't play any part in their decision. "We just read about it last week."
Meanwhile Brocker's third quarter revenue was up 52 per cent for fiscal year 2001, ending December 31, 2000, despite the Australian irregularities.
April 11 meeting to decide fate on Nasdaq Beleaguered Brocker remains anxious as its shareholders meet in Edmonton on April 11 to find a way of preventing the company from being delisted on Nasdaq by mid-May. Brocker's share price stood at $US0.31 on April 2. On March 29, the day Brocker announced its deal with Littauer was canned, the share price dropped to $US0.25 and then jumped to $US0.31. The lowest the vendor can go without jeopardising a four-to-one share consolidation to lift its share price above $US1 is $US0.25.Nasdaq has given Brocker a May deadline.