Ting Hsin International Group (頂新國際集團), the Taiwanese-owned conglomerate that has been embroiled in tainted food scandals, yesterday said the Malaysian buyer of its stake in the Taipei 101 skyscraper has pulled out and that the group is unsure of its next move.
The group added that it has also given up efforts to buy a controlling stake in local cable-television operator China Network Systems Co (CNS, 中嘉網路), given its slim chance of winning government approval or bank loans.
“The group is now at its wits’ end as to what to do with its 37 percent stake in Taipei Financial Center Corp (TFCC, 台北金融大樓公司),” the firm that operates Taipei 101, company spokesman Ted Chia (賈先德) told a press conference.
The statement came after IOI Properties Group Bhd said in a stock exchange filing in Malaysia that it would not extend an agreement to buy the stake for NT$25.14 billion (US$808.13 million) after the contract expired on Thursday.
Neither side sought to extend the contract since Taiwanese authorities are unlikely to approve the share transfer, Chia said.
The Ministry of Finance, the largest shareholder in TFCC with a 44 percent stake, voiced objections to the deal, which would give Ting Hsin enormous profits and pose a threat to government interests in the national landmark.
The ministry has called on Ting Hsin to liquidate TFCC shares — at reasonable prices — as its involvement in a series of food scandals is hurting the tower’s image.
The Investment Commission said it would not carry out the official review process for the share transaction and would return the applications to the two companies.
“We did not ‘deliberately’ stall a review meeting to let their contract expire,” Investment Commission acting executive secretary Emile Chang (張銘斌) told a press conference.
The commission previously planned to convene a meeting to review the deal at the end of this month, Chang said.
Chia said Ting Hsin is willing to consider any moves that would benefit Taipei 101, but added that its share prices have risen significantly and the market alone should decide its actual worth.
The ministry has suggested Ting Hsin sell its stake in TFCC at NT$13 per share — on par with its purchase costs years back — because the public would not accept Ting Hsin profiting from the deal.
Chia said that the offer would be like outright plunder on the part of the government, and that it would scare away any private investment in the future.
“The company is being pushed into a corner, unable to buy or sell assets, while banks refuse to extend credit,” he said.
Additionally, Ting Hsin recently called off an attempt to buy a 60 percent stake in CNS for US$2.4 billion from private equity fund MBK Partners Ltd, Chia said.
The purchase agreement expired late last month and Ting Hsin decided to accept that on concerns the government would quash the deal if the company filed applications, Chia said.
However, Chia denied that Ting Hsin is selling off an affiliated 4G wireless service provider, Taiwan Star Telecom Co (台灣之星), saying that the company remained interested in the telecom business.
“The company will not consider the option unless potential buyers make decent offers,” Chia said.
Financial authorities have asked lenders to withhold credit from Ting Hsin and affiliates to punish its involvement in food safety scandals.
Additional reporting by Lauly Li
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