TAIPEI, Taiwan - Ting Hsin International Group yesterday confirmed that it has struck a deal to sell its stake in a company that controls Taipei 101, amid widespread calls for the food giant to leave Taiwan in the wake of a cooking oil scandal.
Ting Hsin signed an agreement with Malaysia's IOI Properties Group Friday to sell the 37.1 per cent it owns in Taipei Financial Center Corp. (TFCC) - which owns the skyscraper - for about NT$25.14 billion (S$1.06 billion), said Chia Hsien-te, spokesman for the Taiwan-based conglomerate.
The deal, which comes a few weeks after Ting Hsin was forced to hand over the management of the iconic building, will have to be approved by the Taiwan government as it involves a foreign business.
Ting Hsin is looking to allocate part of the proceeds from the transaction to set up a NT$3 billion food safety fund it has pledged following the outbreak of the food scandal, Chia said.
The promise of the food safety fund has failed to placate angry consumers who have been demanding Ting Hsin leave the Taiwan food market and sell its stake in the tallest building of the nation.
Wei Ying-chung, a member of the family from the central county of Changhua that founded Ting Hsin, has been remanded into custody amid an extensive probe into Ting Hsin and its subsidiaries for supplying allegedly substandard oils.
Ting Hsin bought its stake in TFCC five years ago for about NT$8 billion after it made a high-profile return to Taiwan from China where it built a food empire.
The Ting Hsin spokesman said the group will abide by Taiwan's laws in the deal, and after completing all necessary paperwork, it will seek approval from the Investment Commission (IC) of the Ministry of Economic Affairs.
An IC official was cited by the United Evening News as saying that any foreign investments must obtain the commission's approval.
The IC will seek advice from other government bodies, particularly the Ministry of Finance, when screening the Taipei 101 deal, the official said.
Finance Minister Chang Sheng-ford declined to comment, saying he was not aware of the deal. But he said his ministry would not be a position to "approve" or "reject" the private business of Ting Hsin, according to the United Evening News.
Before Ting Hsin's confirmation of the deal, media reports had already broken the news, citing a filing by IOI Properties with the Kuala Lumpur Stock Exchange.
The media reports said IOI Properties is controlled by Malaysia's fifth richest man, Lee Shin Cheng, and the deal will help the Malaysian group receive stable rental income from Taipei 101.
The building is a tourist attraction and most of its spaces have been rented out.
Ting Hsin is the second-largest shareholder of TFCC, while government-invested ventures, including Mega Financial Holding Co., First Financial Holding Co. and Hua Nan Financial Holding Co., jointly hold a 44.35-per cent stake.
Ting Hsin had previously stressed that it would not sell its stake in TFCC, but it is believed that it has come under financial pressure as a result of the widespread boycott by consumers of its products and banks tightening its credit.
Chia said that Ting Hsin is now burdened with more than NT$40 billion in debt and may seek to sell more assets after the Taipei 101 deal.
But the group spokesman was cited by the Central News Agency as saying Ting Hsin has no plans to sell Taiwan Star Cellular Corp., its telecommunications arm tapping the local 4G market.