Thousands of Far Eastern Group employees took to the streets yesterday to protest what they called unjust and illegal interference by the Ministry of Economic Affairs in their company’s long struggle to take control of Pacific Sogo Department Stores Co (太平洋崇光百貨).
The protesters rooted for the group, chanting slogans against the ministry’s approval of a proposal by interim managers from Pacific Distribution Investment Co (太平洋流通), a holding company for the department store chain, to hold a shareholders’ meeting and reshuffle the board in three months.
Pacific Distribution has been involved in an ongoing court battle with Far Eastern Group (遠東集團) over the ownership of the company. The ministry’s approval is seen by Far Eastern Group as a move that could jeopardize the group’s ownership of Sogo.
Far Eastern Group chairman Douglas Hsu (徐旭東), who originally expressed his wish to participate in the protest, did not show up.
On May 7, he announced that the group would suspend all of its investments in Taiwan following a spat with the ministry’s Department of Commerce over Sogo.
The protesters also demanded that the ministry restore six capital injections — totaling NT$4.01 billion — by the group into Pacific Distribution between 2002 and 2008 that were revoked by the commerce department in 2010.
A protester who refused to be named said the ministry has gone overboard to make unjust rulings against Far Eastern Group while the ownership dispute is still proceeding in the courts.
Department of Commerce Director-General Yeh Yun-lung (葉雲龍) said yesterday that the ministry had followed due process when making rulings in the Sogo ownership dispute.
“The ministry followed proper procedures when it revoked the group’s capital injections to Pacific Sogo Department Stores in 2010, as well as approving its rival’s application to hold a shareholders’ meeting and to reshuffle the board,” Yeh said.
He said the commerce department revoked the capital injections because they were the result of a forgery and they had been ruled illegal by the Supreme Administrative Court.
The commerce department also followed due process when it approved Pacific Distribution’s application to hold a shareholders’ meeting and to reshuffle the board because it was done according to the law, Yeh said, adding: “We would not have survived so long if we didn’t follow due process.”
Sogo, the country’s second--largest department store chain, has been a cash cow for Far Eastern Group and therefore the group has a big stake in its ownership.
Yesterday’s street protest was the second by Far Eastern Group employees since the department of commerce on May 4 approved Pacific Distribution’s application to hold a shareholders’ meeting.
In Taipei trading, Far Eastern Group shares dropped 3.56 percent to NT$27.1 yesterday, compared with a decline of 2.18 percent on the benchmark TAIEX.