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A power struggle for control of one of Taiwan’s favorite household-appliance brands descended into acrimony after the company’s chairwoman avoided being ousted in a controversial shareholder vote.
Lin Kuo Wen-yen was re-elected chairwoman of Tatung Co. as shareholders voted to select the company’s nine-person board at a meeting Tuesday. She successfully retained control of the company by allegedly blocking dozens of institutional and individual shareholders from taking part in the vote. The investors who were denied their vote hold over 50% of the company’s shares, according to a Facebook post by Huang Kuo-chang, a former lawmaker who was a candidate to be one of the company’s independent directors.
The vote marks the latest skirmish in a long-running battle for control of the board between Lin Kuo and a group of investors led by Wang Guangxiang, the head of a local construction company and one of the Tatung’s biggest shareholders.
Tatung’s current management asked Taiwan’s financial regulator to verify the sources of Wang’s funds earlier this year over suspicions he has backing from Chinese investors. Only qualified mainland Chinese institutional investors are allowed to buy Taiwanese shares, and are limited to stakes of 10%, according to regulations.
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Shares of Tatung dropped 1.6% on Tuesday, their biggest fall in nearly two weeks. The company’s share price was flat this year after falling 19% in 2019, its biggest decline in four years.
The Tatung board’s voting procedures, including its “arbitrary” decision to bar shareholders suspected of being backed by Chinese capital from voting Tuesday, are flawed, according to a statement from the Securities and Futures Investors Protection Center, a shareholder rights organization. It added that Tuesday’s vote was the “biggest setback” in Taiwan’s efforts to strengthen corporate governance. The organization condemns such acts and may request a vote annulment if needed, it said.
Shareholders who have concerns about the leadership vote at Tuesday’s meeting have 30 days to request that the courts annul the resolution, the Taipei-based Central News Agency reported, citing an unidentified official from the Ministry of Economic Affairs.
One of Taiwan’s oldest home appliance brands, Tatung is famous for its iconic rice cookers. Despite reporting annual losses for much of the past decade, the company has appeal as an investment target due to its real estate holdings, which include an entire block in one of Taipei’s most desirable neighborhoods.
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