Far Eastern Group (遠東集團) chairman Douglas Hsu (徐旭東) said yesterday the group would suspend all of its investments in Taiwan, following a dispute with the Ministry of Economic Affairs over its ownership of Pacific Sogo Department Stores Co (太平洋崇光百貨).
Hsu’s remark came after the ministry's Department of Commerce on Friday last week approved a proposal by interim managers at Pacific Distribution Investment Co (太平洋流通), a holding company for Sogo Department Stores, to hold a shareholders meeting and reshuffle the board in the next three months — a move that Hsu said would undermine the group’s ownership of Sogo Department Stores.
“As the courts are still reviewing ongoing Sogo ownership litigation, and both the legality and appropriateness of the interim managers remain open to question, the ministry’s decision is illegal,” Hsu said at a press conference.
The group, which owns Far Eastern Department Stores Co (遠東百貨) and has operations in telecommunications, textile manufacturing, cement supplies and shipping services, said the ministry should not have allowed a special shareholders meeting to go ahead, as a local district court has said the current Sogo board under chairperson Sophia Huang (黃晴雯) is legal.
Far Eastern Group also questioned the commerce department’s ruling in 2010 to revoke six capital injections totaling NT$4.01 billion by the group into Pacific Distribution between 2002 and 2008.
“Who is the Ministry of Economic Affairs trying to benefit?” local cable TV network UBN yesterday quoted Hsu as saying.
“I am here to announce two things: First, Far Eastern Group will stop all investments in Taiwan, and second, we will take to the streets to protect our interests,” Hsu said. “With the ministry’s unreasonable behavior, how would anyone dare to invest in Taiwan?”
In September 2002, Far Eastern Group secured control of Pacific Distribution from Sogo’s owner, Pacific Construction Co (太平洋建設) via a recapitalization, including the Sogo chain of department stores in Taiwan and the Pacific Department Store group in China.
However, the long legal battle between Pacific Construction’s Chang (章) family and Far Eastern Group over Sogo’s ownership is unresolved. In the intervening period, Pacific Distribution has also become involved in a dispute with Far Eastern Group over whether Hsu’s group has legal “management rights” to Sogo, or is merely “a shareholder” in the company.
Far Eastern Department Store shares fell 4.35 percent yesterday, closing at NT$31.9 on the Taiwan Stock Exchange.