Hon Hai Precision Industry Co (鴻海精密) yesterday said it would not send representatives to the board of flat-panel maker Innolux Corp (群創光電).
Hon Hai, known as Foxconn Technology Group (富士康科技集團) outside of Taiwan, said in a statement that its wholly owned subsidiary Hyield Venture Capital Co (鴻揚創投), which owns a 1.67 percent stake in Innolux, would not send any representatives to the flat-panel company as board members.
Following the announcement, Hon Hai shares rose 0.48 percent to NT$104.5, while Innolux shares fell 0.74 percent to close at NT$13.35 on the Taiwan Stock Exchange.
Innolux, which has proposed reducing its capital by 9.5 percent to NT$95.564 billion (US$3.21 billion), has scheduled an annual general meeting for June 24 to elect new board members and vote on the capital reduction plan.
Hyield Venture Capital has two representatives — James Yang (楊柱祥) and Ting Chin-lung (丁景隆) — on the Innolux board.
However, Hon Hai said that Yang and Ting, who have been renominated, would now represent themselves as individuals.
Despite Hon Hai founder Terry Gou (郭台銘) pouring substantial funds into the sector, Hon Hai said that it only owns a minority share in Innolux and has not made significant investments in the flat-panel business.
According to Innolux’s annual report for last year, Gou, Hyield Venture Capital and other Hon Hai affiliates collectively owned a nearly 6.8 percent stake in Innolux.
Innolux said in a separate statement that despite Hon Hai's exit from Innolux's board, Gou has shown support for the board nominees and will continue his backing of the company.
In addition to the nominations of Ting and Yang, Wang Jyh-chau (王志超), chairman of the Innolux Education Foundation, and Innolux chairman Jim Hung (洪進揚) were also renominated as board members.
Another five people have been nominated by Innolux as independent board members.
It will be the first time Hon Hai will be absent from Innolux's board since 2003, when the flat panel company was founded. Innolux then launched an initial public offering on the Taiwan Stock Exchange in 2006 and completed a merger with Chi Mei Optoelectronics Corp (奇美電子) and TPO Display Corp (統寶光電) in 2010, emerging as the surviving entity.
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