The Ministry of Finance (MOF) yesterday reiterated its objection to Ting Hsin International Group’s (頂新國際集團) plan to sell its stake in Taipei Financial Center Corp (TFCC, 台北金融大樓公司), the operator of Taipei 101, to a Malaysian land developer, an objection that could sink the deal.
“It would be unacceptable to the public if Ting Hsin made substantial gains from selling its stake in TFCC while embroiled in food safety lawsuits,” Vice Minister of Finance Wu Tang-chieh (吳當傑) said at a news conference.
The ministry’s objection would thwart Ting Hsin’s bid to sell its 37.17 percent stake in TFCC for NT$25.14 billion (US$805.92 million) to IOI Properties Group Bhd, Malaysia’s leading land developer, as the deal requires unanimous approval from the Ministry of Economic Affairs’ Investment Commission.
The Investment Commission said it would convene a cross-ministerial meeting next month to review Ting Hsin’s proposal to sell its stake in TFCC to IOI Properties’ subsidiary Strategy Assets after it receives feedback from all relevant government agencies.
The commission will reject the proposal if any member of the commission disapproves of the deal at the review, the commission said.
With the ministry’s objection, the “deal is on the brink of being rejected,” Investment Commission Acting Executive Secretary Emile Chang (張銘斌) said.
According to Wu, Ting Hsin would see NT$18 billion in profit from selling its TFCC stake at NT$46 per share, a significant increase from the NT$13 per share it paid to acquire the stock a few years ago.
While the commission has yet to decide on when to rule on the Tsing Hsin case, the finance ministry plans to withhold its support of the sale, Wu said, rendering a unanimous approval impossible.
The MOF, the largest shareholder in TFCC with a 44.35 percent stake, made its stance known in a detailed letter to the commission yesterday, after consulting the commission last month on the matter, Wu said.
The finance ministry also voiced concerns about capitalization and management rights stability at TFCC.
IOI Properties would win five director seats on the TFCC board if the deal went through, although the firm indicated last year it would limit its role to that of capital investor, Wu said.
Taipei 101 usually hosts the capital’s internationally renowned New Year’s Eve fireworks show, but the practice might not be feasible if new owners object, the vice minister said.
“That would inevitably hurt public interest,” Wu said.
In addition, IOI Properties intends to acquire TFCC shares with bank loans and the interest of which it might use to dodge corporate income taxes, Wu said.
While this is legal, it is not favorable for TFCC or the national treasury, the vice minister said.
The Ministry of Finance aims to win majority control of TFCC’s 13 board seats during the board’s elections in December, Wu said, adding that it controls six seats now.
The MOF remains interested in buying TFCC shares from Ting Hsin if the asking price is lowered to NT$13 per share, Wu said.
“The public would frown on any profit-taking by Ting Hsin following the spate of food safety scandals,” he said.
Additional reporting by Lauly Li
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