Far Eastern to halt investments in Taiwan to secure Sogo ownership

8 May 2012 (Last Updated May 8th, 2012 02:00)

Taiwanese conglomerate Far Eastern Group will suspend all of its investments in the country, following a dispute with the Ministry of Economic Affairs over its ownership of department store chain Pacific Sogo Department Stores.

Taiwanese conglomerate Far Eastern Group will suspend all of its investments in the country, following a dispute with the Ministry of Economic Affairs over its ownership of department store chain Pacific Sogo Department Stores.

Far Eastern chairman Douglas Hsu said the group will suspend all of its investments in Taiwan and also engage in self-help measures and take to the streets.

Hsu's remark came after the Department of Commerce granted the request of the interim managers of Pacific Distribution Investment, the holding company of Sogo Department Stores, to commence a shareholders' meeting and reshuffle the board in the next three months.

Hsu noted that the move would undermine the group's ownership of Sogo Department Stores.

"The ownership dispute of SOGO is still being fought in court, and the legality of the interim managers of Pacific Distribution is in question," Hsu said.

"In granting the request of the interim managers that a SOGO shareholders' meet be held, the Commerce Department of the MOEA has gone beyond its jurisdiction."

The group also questioned the department's ruling in 2010 to revoke six capital injections totalling NT$4.01bn ($136.88m) by the group into Pacific Distribution Investment between 2002 and 2008.

Hsu has fought for ownership of Sogo with Pacific Distribution's chairman Lee Heng-lung, whom the Department of Commerce recognises as the department stores' legal owner.

The long legal battle between Far Eastern Group and Pacific Construction's Chang family and over Sogo's ownership remains unresolved.

Far Eastern Group, which owns Far Eastern Department Stores, also has operations in textile manufacturing, cement supplies and shipping services.

The Taiwanese group's Retail system comprises of Far Eastern Department Stores, Pacific Sogo Department Stores and Far Eastern Ai Mai Hypermarkets, operating with a total of 44 stores.