Shin Kong, China partner settle dispute

Shin Kong Mitsukoshi Department Store (新光三越) and Beijing Hualian Group (北京華聯集團) announced yesterday that they had settled a dispute over their joint-venture operations in the Chinese capital and would continue with the partnership.

"Problems arising from the cooperation were simply business disputes ... owing to differences in operating and management principles," according to a joint statement released at 3am yesterday, after a marathon negotiation session of more than 10 hours between Shin Kong chairman Wu Tung-hsing (吳東興) and his Chinese counterpart, Ji Xiao'an (吉小安), in Beijing.

"Beijing Hualian reckoned the incident was a misunderstanding and has apologized," the statement said.

More than 10 Taiwanese staff members of Shin Kong -- operator of Taiwan's largest department store chain -- will return to work in Beijing soon, Shin Kong spokeswoman Shauna Lee (李香萩) said by telephone yesterday.

The two parties will continue the negotiations and resolve the dispute according to the law, she said.

The two companies' 50/50 joint venture in Beijing -- Shin Kong Place (新光天地) department store -- will remain intact, and another joint-holding department store in Chongqing, Sichuan Province, will not be affected by the conflict, Lee said.

"We will be more cautious about our Chinese investment and in communicating with our Chinese partners," Lee said.

The sensational dispute over the Taiwanese investment in China broke out when Steven Wu (吳昕達), general manager of Shin Kong in Taiwan and Shin Kong Place in Beijing, which started operating in April, was asked to get off a plane in Beijing late last month for questioning over his alleged involvement in an "economic crime."

The alleged crime was reported by Beijing Hualian, which accused some Taiwanese executives of accepting bribes and conflict of interests relating to a construction project. Later, all Taiwanese staff members at Shin Kong Place were removed from their positions. Shin Kong denied the accusations.

Steven Wu returned to Taiwan on Sept. 1 thanks to the coordination of China's Taiwan Affairs Office (TAO) after the dispute hit the headlines.

Wu will continue in his post in the Beijing venture, Shin Kong's Lee said.

The dispute also came to the notice of the Chinese authorities, with Chinese Vice Premier Wu Yi (吳儀) telling the TAO last week to mediate in the conflict.

It is believed that the settlement between Shin Kong and Beijing Hualian was reached after intervention from the Chinese government, which feared that the incident may mar Beijing's efforts in attracting foreign investment.

"It is our consistent policy to protect Taiwanese investment and improve cross-strait business ties," TAO spokesperson Li Weiyi (李維一) told a press conference yesterday.

Of the more than 2,700 trade disputes the TAO has handled, 69.1 percent were resolved, Li said.