Amid a widening bribery scandal, Farglory Land Development Co’s (遠雄建設) shareholders yesterday approved plans to cut this year’s dividend from NT$3.5 to NT$1.5 per share after the company said it needs money to cope with a potential credit crunch.
The developer reportedly borrowed about NT$50 billion (US$1.66 billion) from several banks, and some lenders are considering keeping the firm at arm’s length because its chairman Chao Teng-hsiung (趙藤雄) has been detained on suspicion of bribing government officials to win urban renewal projects.
The dividend policy change would raise Farglory Land’s cash position by NT$1.7 billion, from NT$396 million in late March, company spokesman Hung Chih-hung (黃志鴻) said.
Photo: Chang Chia-ming, Taipei Times
The payout adjustment replaces a previous announcement that the payout would be NT$3.5 per share in cash based on net income of NT$6.68 billion last year, or earnings per share (EPS) of NT$8.66.
The developer recorded NT$1.18 billion in net profit in the first quarter of this year, for an EPS of NT$1.42, company data showed.
“It is commonplace for building companies to maintain low cash levels,” Hung said, adding that Farglory Land would talk to banks about protecting its credit standing.
Most banks have business ties with Farglory Land and its affiliates, which include Farglory Life Insurance Co (遠雄人壽), Farglory Hotel Co (遠雄悅來飯店), Farglory FTZ Investment Holding Co (遠雄自貿港投資控股), Taiwan Solar Energy Corp (元晶太陽能) and Golden Biotechnology Corp (國鼎生物科技).
State-owned Land Bank of Taiwan (土地銀行) is the biggest creditor, Huang said.
Land Bank has about NT$4.9 billion exposure to Farglory, followed by Taiwan Cooperative Bank (合庫銀行) with NT$3.9 billion and Chang Hwa Commercial Bank (彰化銀行) with NT$3.8 billion.
The lenders plan to honor syndicated loan agreements for housing projects in New Taipei City’s Linkou (林口) and Sijhih (汐止) districts as they are almost complete, Land Bank said in a statement yesterday.
However, some of the banks are considering freezing new credit because the bribery scandal and investigation may hurt Farglory’s corporate image as well as its financial health, local media reports said.
Acting chairman Frank Chao (趙文嘉), Chao Teng-hsiung’s (趙藤雄) eldest son, said the company would continue with its existing construction projects, but temporarily stay away from government-linked housing developments.
The younger Chao said he has very limited knowledge of the bribery investigation or the people involved.
“[Given my] low-key [personality] and education abroad, I am leading the company in a different fashion, but I will not negate existing contracts,” he said.
He said the investigation into the alleged bribes has had little impact on the company even though the Taoyuan County Government has terminated a contract for public housing in Bade City (八德).
Shares in Farglory Land closed down 1.68 percent at NT$43.9 yesterday. They have shed 12.2 percent this week, bucking the broader market’s 0.65 percent rise over the same period, Taiwan Stock Exchange data showed.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
RSS