Hon Hai Precision Industry Co (鴻海精密) yesterday issued a prewarning to investors that it might face a delay in receiving proceeds from the disposal of a 9.8 percent stake in China’s Tsinghua Unigroup Co (清華紫光).
The iPhone assembler made the statement in a filing with the Taiwan Stock Exchange following a report by the Chinese-language Liberty Times (sister paper of the Taipei Times) expressing investor concern that the payment might be late or not forthcoming, citing information published by Hon Hai’s China-listed Foxconn Industrial Internet Co (FII, 富士康工業互聯網).
FII, which trades on the Shanghai Stock Exchange, on Friday announced its plan to sell its Tsinghua shares to Yantai Haixiu IC Investment Center (煙臺海秀積體電路產業投資中心) for no less than 5.38 billion yuan (US$835.7 million).
Photo: Carlos Garcia Rawlins, Reuters
Hon Hai disclosed FII’s plan in a filing with the Taiwan Stock Exchange on the same day.
FII holds the Unigroup stake through 99.9 percent-held Xingwei (Guangzhou) Industrial Investment Partnership Ltd (興微廣州產業投資).
Hon Hai, based in New Taipei City’s Tucheng District (土城), said in yesterday’s exchange filing that Yantai Haixiu should make the payment within five days after selling Tsinghua’s shares to a third party.
Yantai Haixiu should complete the transaction no later than March 15 after completing a report assessing the Chinese company’s value, Hon Hai said.
Yantai Haixiu has not yet transferred the payment to Xingwei.
“There is a risk that Yantai Haixiu might not be able to make the payment, as agreed, for the share transfer,” Hon Hai said in the filing.
Hon Hai said the acquisition of Tsinghua was purely for financial investment, given its decent profitability following its turnaround, Hon Hai chairman Young Liu (劉揚偉) told investors in August, dismissing speculation that the company would join forces with Tsinghua to make a foray into the semiconductor industry.
Tsinghua designs semiconductors, and manufactures servers, routers and switches, Hon Hai said in the filing.
To restructure its finances, Tsinghua spun off memorychip maker Yangtze Memory Technologies Co (長江存儲) and memorychip contract manufacturer Wuhan Xinxin Semiconductor Manufacturing Co (武漢新芯), Liu said at the time.
Hon Hai may be fined up to NT$25 million (US$814,094) for investing in Tsinghua without obtaining regulatory approval in Taiwan, the Investment Commission said yesterday.
A cross-ministry review was originally scheduled for September, but was postponed due to insufficient information about Hon Hai’s Tsinghua investment plan, the commission said.
“As Hon Hai is in the process of divesting Tsinghua, we are monitoring how it plays out. We have to make sure that Hon Hai reduces its shareholding to zero before jumping into any conclusions,” Investment Commission spokesperson Lu Tseng-hui (呂貞慧) said by telephone.
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