Ting Hsin International Group (頂新集團), a food conglomerate in Taiwan, announced on Monday the closure of the Taiwan operations of its subsidiary Tingyi (Cayman Islands) Holding Corp. (康師傅控股), group spokesman Ted Chia (賈先德) said Monday.
Chia said Ting Hsin, which was embroiled in a series of food scandals in Taiwan in 2014 that sparked boycotts against the group’s food products, decided at a board meeting to liquidate Tingyi Taiwan.
The closure, however, will not affect trading of Tingyi’s depositary receipts on the Taiwan Stock Exchange and a listing of the stock will continue on the main exchange, Chia said.
Shanghai-headquartered Tingyi, which is listed on the Hong Kong stock market, issued depositary receipts in Taiwan in December 2009. Tingyi is best known for supplying instant noodles under the “Master Kong” (康師傅) brand.
Chia said the Hong Kong listed company has stopped producing Master Kong instant noodles in Taiwan since food scandals involving Wei Chuan Foods Corp. (味全), another subsidiary of Ting Hsin, surfaced.
As a result, Ting Hsin’s board of directors decided to shut down Tingyi’s operations in Taiwan, effective on Jan. 1, to allow Tingyi to withdraw from the Taiwan market, Chia said.
Taiwan’s Investment Commission said Tingyi needs to get approval from the commission for its withdrawal because Tingyi is a foreign-based company; otherwise the Shanghai-based firm cannot remit its funds out of Taiwan.
To date, the commission has not yet received any application for Tingyi’s business withdrawal.
Chia said Tingyi Taiwan’s creditors will be able to claim their rights over the Taiwan operations in three months after Tingyi makes the liquidation decision public in Taiwanese media.
Due to the food scandals, Wei Chuan incurred a loss per share of NT$0.5 (US$0.016) in 2014, compared with earnings per share of NT$1.73 seen in 2013.
Its loss per share expanded to NT$3.78 in 2015 and its loss for the first nine months of 2016 stood at NT$0.89 per share.
Also affected by the food scandals, Tingyi’s instant noodles and beverage sales in the first half of 2016 fell about 14 percent from a year earlier, with profits from instant noodles and beverages down more than 60 percent and more than 70 percent, respectively, year-on-year.
Tingyi’s depositary receipts closed up 0.78 percent at NT$19.50 in Taiwan on Friday.
Source: Focus Taiwan News Channel