Local major hypermarkets decided to pull White-Westinghouse branded electronics off the shelves on Monday, after reports of a possible financial crisis in local general distributor Diastar Home Appliance Co (太尹).
"Our procurement department got wind of the issue on Monday and we pulled the products the same day," Henry Yin (
Geant, the nation's third-largest hypermarket chain, removed the products because of concerns that consumers may not receive warranty services after purchases, should Diastar fail to recover from the crisis.
Diastar, licensed by Stockholm-based Electrolux AB to make appliances in Taiwan under the White-Westinghouse brand, has failed to honor checks it issued to Sampo Corp (
Diastar failed to honor NT$90 million (US$2.7 million) worth of checks issued for Sampo to make washing machines and refrigerators under the White-Westinghouse label, Sampo spokeswoman Lin Re-ing (
Sampo has been a supplier to Diastar for two decades, Lin said.
obligations
Diastar is unable to meet an estimated NT$1 billion in financial obligations, according to yesterday's Chinese-language Commercial Times.
Diastar Chairman Titan Chung (莊智和) left Taiwan on May 18, the newspaper said. Calls made to Diastar were unanswered.
The product withdrawal should not impact Geant greatly as White- Westinghouse items -- such as washing machines and refrigerators -- only account for 3 percent sales of Geant's all home appliances, Yin said.
But Carrefour Taiwan, the nation's largest hypermarket operator, said it is still monitoring the situation and if Diastar is able to overcome the crisis.
Taipei-based Diastar, distributing White-Westinghouse products in Taiwan since 1985, is believed to owe more than NT$100 million to local contract manufacturers including Sampo and Proton Communications Technology Inc (
additional reporting by Bloomberg
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