Chunghwa Picture Tubes Ltd (CPT, 中華映管) yesterday said that most of its employees would only receive part of their monthly salaries as the company has run out of cash due to slumping orders.
The LCD panel maker has used up all of its working funds and would not be able to pay severance fees, retirement fees and other perks, it said in a filing with the Taiwan Stock Exchange.
CPT had applied for insolvency protection with the Taoyuan District Court, but its hopes were dashed after the court on July 29 rejected its restructuring plan and overruled its final appeal.
“The company has depleted all its capital and failed to fully pay employees’ August salaries on Sept. 11,” CPT said in the filing. “The board of directors has approved the proposal to pay employees part of their salaries on Sept. 12.”
Based on the plan, the company is to pay foreign workers 40 percent of their monthly salaries, while local workers whose monthly pay is lower than NT$50,000 (US$1,610) would receive 55 percent.
Employees with monthly salaries between NT$50,000 and NT$70,000 would be paid 15 percent and those with monthly salaries higher than NT$70,000 would only receive 10 percent, CPT said.
The company would also freeze pay to employees in managerial positions higher than department director, it said.
To pay debts owed to employees, the company said it would dispose of its assets to raise cash.
The Taoyuan Department of Labor called on CPT’s parent company, Tatung Co (大同), to help solve the financial difficulty and safeguard employee interests.
“Since Tatung holds seats on CPT’s board, Tatung should take responsibility and help CPT tackle its financial crisis,” the department said in a statement.
CPT could face a fine of NT$20,000 to NT$1 million for not paying its employees their full salaries on time, the department said.
The 48-year-old CPT two weeks ago faced imminent risk of collapse after it failed to receive any orders and said it would lay off all of its 2,100 employees.
The company also owed NT$100 million in electricity bills to Taiwan Power Co (台電) for its main flat-panel manufacturing fab in Taoyuan’s Longtan District (龍潭), which was shut down on Monday last week due to a power outage.
In related news, Japan-based Sakai Display Products Corp (SDP), which is partly owned by Sharp Corp, yesterday said that former Hon Hai Precision Industry Co (鴻海集團) chairman Terry Gou (郭台銘) has given up his more than 50 percent stake in the company in an attempt to draw a line between Gou and his LCD investment in China.
Gou’s 10.5-generation LCD plant in Guangzhou, China, has halted production amid plummeting panel prices and is seeking new capital, the Nikkei Asian Review reported.
The plant was set up under an agreement between Gou and the Guangzhou City Government in March 2017, a few months before Gou’s LCD project in Wisconsin was agreed upon, the newspaper said.
SDP said that the Guangzhou plant has completed its first-phase construction and is looking to increase production efficiency and technological skills, it reported.
Additional reporting by Natasha Li
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