Management tussles involving the local shipping industry escalated yesterday, as Chinese Maritime Transport (
In the ads, Chinese Maritime questioned Taiwan Navigation Co's (
"As a shareholder of [state-controlled] Taiwan Navigation, Chinese Maritime strongly suspects that the company's decision to swap shares with Yang Ming was unlawful," the carrier said in the half-page ads published in the Chinese-language Economic Daily and the Commercial Times yesterday.
Chinese Maritime is controlled by Hong Kong's shipping tycoon John Peng (彭蔭剛), who owns a 67 percent stake in the bulk shipping company.
With a 28.85 percent stake, the company is the single largest shareholder of Taiwan Navigation.
Call for help
In its ads, Chinese Maritime asked non-state shareholders of Taiwan Navigation to cooperate in requesting that the Financial Supervisory Commission (FSC) launch a probe into the affair and annul the share swap.
Last Friday, the boards of state-controlled Taiwan Navigation and Yang Ming approved a bilateral share swap transaction through the issuance of new shares, with one Taiwan Navigation share exchanged for 1.35 of Yang Ming's.
The plan
Under the plan, Yang Ming would issue 69.6 million new shares to Taiwan Navigation and thereby lift its holdings in the nation's sixth-biggest shipping firm from 3.1 percent to 13.8 percent, a report by Bloomberg said.
As a result, pan-state holdings in Taiwan Navigation would increase to approximately 41 percent, including a 27 percent stake controlled by the Ministry of Transportation and Communications (MOTC), the Economic Daily reported yesterday.
By contrast, Chinese Maritime's holdings in the rival would drop to 25.7 percent.
Unfair
Casting doubt on a deal that unfairly benefited Yang Ming, Chinese Maritime said that "the reasonable share swap ratio should be much higher than the announced 1 to 1.35."
Taiwan Navigation's decision to issue new shares was meant to dilute the holdings of existing shareholders, which would in turn lead to the dilution of earnings per share and share price, Chinese Maritime said.
The carrier also said that in its capacity as a regulator, the MOTC had failed to uphold its neutral stance and disregarded the interests of investors.
In response to the accusation, Minister of Transportation and Communications Tsai Duei (蔡堆) said that the ministry that oversees the shipping industry never meddled in the operations or share swap deals of shipping companies, the Economic Daily reported.
No request
Meanwhile, FSC spokesperson Susan Chang (張秀蓮) said yesterday that the commission had not received any request for an investigation from Chinese Maritime.
The commission would review the share swap, Chang said during a phone interview yesterday.
If nothing untoward was uncovered, the regulator would not intervene, she said.
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