Samsung fends off challenge
The most powerful corporate family in South Korea got help from another dynasty in its campaign to fend off a challenge from billionaire activist investor Paul Elliott Singer. A unit of Samsung Group on Wednesday agreed to sell shares valued at more than US$600 million to a company with ties to the Hyundai conglomerate. That sale unlocks voting rights the Lee family can use to push through a merger that Singer’s Elliott Associates LP opposes on grounds the offer is too low. The deal escalates a battle between the Lee dynasty that controls a US$270 billion business empire and an investor known for taking on the likes of Argentina’s government. Elliott’s opposition threatens to disrupt a restructuring needed by the Lee family to solidify its control over Samsung. Samsung C&T Corp said it would sell all its 8.99 million treasury shares to KCC Corp, a company headed by a member of the Hyundai family.
Fitch questions HSBC plan
Fitch Ratings Ltd questioned HSBC Holdings PLC chief executive Stuart Gulliver’s three-year plan to boost the comapny’s profitability by expanding in Asia, saying it could spark a downgrade. The plan, which includes cutting as many as 25,000 jobs, would only have a positive impact if the lender “outperforms on the execution of its strategy” while boosting “capitalization significantly,” Fitch said yesterday. “In particular, how HSBC manages its significant planned growth in China and Southeast Asia could hurt the ratings if this leads to a higher overall risk profile and concentration.” Gulliver’s plan, announced on Tuesday, includes cutting staff by about 10 percent, selling operations in Turkey and Brazil, stepping up investment in Asia, and expanding asset management and insurance in places such as China’s Pearl River Delta.
Unemployment rate falls
The nation’s unemployment rate unexpectedly declined to 6 percent last month, Australian Bureau of Statistics data showed yesterday, in a sign the economy could be starting to better adapt to the end of a mining investment boom. About 42,000 positions were added last month, much higher than the 10,000 predicted by analysts, as the jobless rate ticked down from an adjusted 6.1 percent in April. The increase in employment was driven by part-time jobs, which rose 27,300, while full-time roles were up 14,700, the bureau said. The fall comes on the back of data this month showing the mining-driven economy grew a stronger-than-expected 0.9 percent in the first quarter of the year, boosted by exports and consumer spending.
Line launches music service
Mobile messaging giant Line Corp yesterday launched a digital music streaming service in Japan, stepping into a largely untapped market still dominated by sales of compact discs. The new business — which comes weeks before Apple Inc is expected to enter the Japanese market with its own streaming service — offers unlimited access to a collection of more than 1.5 million songs for ￥1,000 (US$8) a month. For those on a budget, a ￥500 fee buys 20 hours of listening time. Line said it would expand its music library to 5 million tunes by the end of the year and to 30 million next year. The service is to feature top-selling artists, from Sam Smith to Michael Jackson, as well as likes of Japanese diva Ayumi Hamasaki and South Korean band Big Bang.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
HEAVY INVESTMENT: Moody’s affirmed the firm’s ‘Aa3’ rating with a ‘stable’ outlook due to its leading position in the industry and ability to match customer requirements Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue this year is expected to increase about 21 percent to NT$1.29 trillion (US$44.01 billion) from NT$1.07 trillion last year, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices, a Moody’s Investors Service report on Wednesday said. TSMC’s rate of revenue growth next year is to increase to 7.5 percent, the ratings agency said. The company, which supplies 5-nanometer chips for Apple Inc’s new iPad series, has introduced the advanced chips ahead of its competitors and gained a significant share of the market for the foundry industry’s
Sony Corp has cut its estimated Play Station 5 (PS5) production for this fiscal year by 4 million units, down to about 11 million, following production issues with its custom-designed system-on-chip (SOC) for the new console, people familiar with the matter said. The Tokyo-based electronics giant in July boosted orders with suppliers in anticipation of heightened demand for gaming in the holiday season and beyond, as people spend more time at home due to the COVID-19 pandemic. However, the company has come up against manufacturing issues, such as production yields as low as 50 percent for its SOC, which have cut into
O2O BICYCLE SHOW: The Taiwan Bicycle Show next year is to be online to offline, with forums, audio-visual conferences and livestreaming of the offline events Local bicycle makers expect demand to continue outpacing supply due to orders triggered by the COVID-19 pandemic, with some companies seeing orders back up through next year. “Next year is all full in terms of orders. Our lead time on components is one year,” Giant Manufacturing Co Ltd (巨大機械) chairwoman Bonnie Tu (杜綉珍) told a news conference in Taipei organized by the Taiwan External Trade Development Council (TAITRA) to announce next year’s Taipei Cycle Show. The pandemic has reduced bicycle supplies and increased demand around the world, Robert Wu (吳盈進), chairman of KMC (Kuei Meng) International Inc (桂盟國際), one of the world’s