Taipei, July 12 (CNA) Shin Kong Mitsukoshi, a joint venture set up by Taiwan’s Shinkong Group and Japan’s Isetan Mitsukoshi Holdings, has sold most of its shares in a half-owned Beijing joint investment, a local commerce association leader said Thursday.
The department store chain yielded 30 of its 50 percent shares to partner Beijing Hualian Group, becoming simply a shareholder of Shin Kong Place – the first Shin Kong Mitsukoshi branch in China, said Kenneth Lo, chair of Taipei-based Chinese National Association of Industry and Commerce.
The reduced stake means the Taiwan-Japan venture will only have a 20 percent share of the store’s profits.
Months after the store opened in April, 2007, a serious dispute over management rights erupted and led to the layoff of several Taiwanese executives.
Wu Shin-da, general manager of Shin Kong Mitsukoshi’s Beijing operation, was detained by Chinese security officials just as he was about to board a plane for Taiwan, a move that caused a stir among Taiwanese businesspeople in China, as well as the Japanese department store sector.
The row was resolved after both sides took legal action and resorted to arbitration, with the Chinese authorities also stepping in to mediate.
The case was one of several major rows between Taiwanese and mainland Chinese businesses.
Lo said this highlighted the importance of a bilateral investment protection agreement, especially after Pacific Sogo Department Stores Co., another large Taiwanese department store chain, said it also had problems with its Chinese partners.
The two sides had hoped to sign an investment protection agreement as early as late 2010, but talks on the pact broke down over such issues as third-party arbitration and quick notification of family members when a Taiwanese businessperson in China is arrested.
Taiwan is pushing for the investment pact because it wants to protect its business people in China, who can be vulnerable in disputes with local governments over land rights and compensation claims.
The next round of high-level cross-Taiwan Strait talks is expected to take place in a month, when a long-stalled investment protection pact will be signed, Taiwan’s top negotiator with China said this month.