The Ministry of Economic Affairs’ Investment Commission has returned Hon Hai Group’s (鴻海集團) application to buy a 9.88 percent stake of Sharp Corp, because of some ambiguity in its investment plan, an official said yesterday.
“We feel Hon Hai was not clear about the investment efficiency in the Sharp deal. We asked them to correct the insufficiency and submit the plan again,” said Emile Chang (張銘斌), Investment Commission Deputy executive secretary and spokesman.
The major concern of the commission, Chang said, is that Sharp’s falling share price would hurt the returns on equity for Hon Hai shareholders.
He said the commission returned the group’s plan on Friday last week.
On March 27, Hon Hai announced its ￥132.9 billion (US$1.6 billion) deal with Sharp, paying the Japanese company ￥550 per share, but on June 24, Hon Hai said it would book a NT$6.4 billion impairment loss on the investment as Sharp’s share prices continued to plunge.
Sharp’s stock price closed at just ￥188 on Wednesday in Tokyo trading as the Osaka-based company struggles to revive its TV business.
On Sunday, Hon Hai chairman Terry Gou (郭台銘) said that Sharp Corp had proposed renegotiating a reasonable price for the stake that it plans to sell to the Taiwanese company.
“It is part of the necessary process,” Hon Hai spokesman Simon Hsing (邢治平) said. “We will revise and reassess the case, and we hope to file an updated application as soon as possible.”
Additional reporting by CNA