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To: Czechsinthemail who wrote (8091)	8/4/2000 8:59:15 AM
From: DJBEINO	Respond to of 9582

Tech stock tax decision derided TAXATION: Premier Tang Fei has decided to tax employee's dividends at their par level rather than market value. But some analysts are worried that it will allow companies to cook their books and cause the government to miss out on revenue By Dan Nystedt STAFF REPORTER Local analysts derided a government decision handed down yesterday that would delay implementation of a tax on employee stock bonuses. Premier Tang Fei yesterday announced that employee stock dividends -- shares typically given to employees as a bonus -- would continue to be taxed at their par value (NT$10) rather than their market value, which in many cases is 13 or 14 times higher. With the announcement, the premier effectively delayed implementing a tax on stock dividends that local stock analysts insist would dilute the value of company stocks and help companies cook their accounting books. One analyst who wished to remain anonymous said that most companies give stock dividends to employees and shareholders that dilute the value of market shares. He said the companies publish a new share price that shows the value of each share after issuing new stocks to shareholders, but the price does not reflect the new shares given to employees as bonuses. The market, he said, will take that into account and shave more points off the share price. The analyst indicated that a revised tax code would clarify accounting regulations and make such stock dividends more transparent. He further charged that companies have given out stock dividends whose market value far exceeded the total after-tax-income of the company, and gotten away with it by factoring in the stock dividend based on its par value (NT$10) rather than market value, which is usually much higher. According to the analyst, in 1999 Realtek Semiconductor (·ç¬R¥b¾ÉÅé¤½¥q) gave employees stock share bonuses valued at NT$1.5 billion on after-tax-income of only NT$740 million which was "basically double what they earned." The company was able to do so by distributing eight million shares of stock to employees which had a par value -- the rate at which the government taxed each share -- of NT$10 each or NT$80 million total. The market value of the shares, however, was much higher -- it closed today at NT$188 per share, giving Realtek's employee stock dividend an NT$1.5 billion value rather than its par value of only NT$80 million. By playing with accounting codes, said the analyst, the firm was able to list the share value at its par value instead of its market value. Moreover, he said that while "Realtek is an extreme example, this kind of activity is common." According to Securities and Futures Commission (SFC, °]¬F³¡) Director Lee Chi-hsien (§õ±Ò½å) companies determine stock dividends based on after-tax-income at open shareholder meetings. If share value is to be diluted by such a bonus, all shareholders have the opportunity to vote and oppose the motion. He said that although such decisions must be filed with the SFC, since such actions are made with shareholder consent, the government rarely opposes them. He pointed out that such bonuses are usually given to high-tech company employees as a way to share profits and supplement income. The government, in seeking to tax such benefits has been seen by some groups as striking a blow against the common worker. But local stock analysts don't see it that way. "I guess most people think of an `employee stock dividend' as something that goes to the guy working the factory floor," said one analyst. "The reality is that the chairman or president of a company has the most to gain from stock dividends and the tax bonuses, not the people lower down in the company." taipeitimes.com

To: Czechsinthemail who wrote (8091)	8/4/2000 9:41:24 AM
From: DJBEINO	Read Replies (1) \| Respond to of 9582

which funds are buying and selling ALSC Funds Buying Which funds like a stock enough to be purchasers? This list shows the largest purchasers of the stock among mutual funds (as of their latest portfolio dates). If you see some good funds on the list, the stock's probably worth checking out. Fund Name Shares Bought (000) Total % Shares Held Total % Fund Assets Star Rating Date of Portfolio Evergreen Small Company Growth B 189 0.46 0.40 2 06-30-00 Alleghany/Veredus Aggressive Growth 62 0.15 0.79 --- 03-31-00 Galaxy II Small Company Index Ret 36 0.09 0.32 2 06-30-00 Vanguard Total Stock Mkt Index 31 0.26 0.01 4 03-31-00 Monetta 18 0.04 0.25 2 04-30-00 Wilshire Target Small Co Value Invmt 10 0.02 0.78 1 03-31-00 Capstone SERV Small Cap Equity C 9 0.02 0.27 --- 06-30-00 Vanguard Small Cap Index 9 0.27 0.05 2 03-31-00 Goldman Sachs Core Small Cap Eqty A 8 0.02 0.13 --- 05-31-00 Wells Fargo Growth Equity I 7 0.02 0.02 3 05-31-00 Schwab Small Cap Index Inv 6 0.22 0.16 2 06-30-00 Phoenix-Zweig Appreciation A 5 0.02 0.14 2 05-31-00 Wells Fargo Diversified Eqty I 5 0.01 0.01 4 05-31-00 AXP Small Company Index A 3 0.29 0.27 2 06-30-00 Consulting Group Small Cap Value Eqty 3 0.06 0.07 2 03-31-00 MainStay Instl Asset Manager Instl 3 0.01 0.01 4 06-30-00 Merrill Lynch Small Cap Index A 3 0.01 0.04 2 03-31-00 Aetna Index Plus Small Cap A 2 0.00 0.42 --- 06-30-00 Wells Fargo Growth Balanced I 2 0.00 0.00 4 05-31-00 MFS New Discovery A 1 0.14 0.11 4 05-31-00 quicktake.morningstar.com +++++++++++++++++++ Funds Selling Which fund managers are getting out? This list shows the funds that have sold stakes in the company as of their latest reported portfolios. Maybe the fund managers are dissatisfied with corporate performance, or maybe the stock ran up and the fund is looking to lock in some gains. Fund Name Shares Sold (000) Total % Shares Held Total % Fund Assets Star Rating Date of Portfolio Hartford Small Company A -199 0.06 0.16 4 06-30-00 Eclipse Small Cap Value -17 0.16 0.77 2 06-30-00 Vanguard Extended Market Index -15 0.22 0.03 3 03-31-00 DFA U.S. 6-10 Small Company -5 0.09 0.14 2 05-31-00 DFA U.S. 6-10 Value -5 0.89 0.33 2 05-31-00 Deutsche Small Cap Index Prem -3 0.00 0.07 2 05-31-00 Summit Apex Russell Small Cap Index -1 0.00 0.06 --- 06-30-00 Van Kampen Small Cap Value A -1 0.01 0.73 --- 06-30-00 quicktake.morningstar.com