FSC to ask Hon Hai for succession plan as Gou eyes presidential bid
Taipei, April 24 (CNA) The Financial Supervisory Commission (FSC) will ask manufacturing giant Hon Hai Precision Industry Co. to disclose its succession plan after the company's chairman, Terry Gou (郭台銘), confirmed his intention to run for president in 2020.
On the sidelines of a legislative committee hearing, FSC chief Wellington Koo (顧立雄) said Wednesday the FSC will instruct the Taiwan Stock Exchange, where Hon Hai's shares are traded, to ask the company to disclose its succession plan, if it has one, as Gou is about to shift his course to politics from business.
Koo said Gou is the first generation leader of Hon Hai, and with him having a different career plan, investors should have concerns whether the company will come up with a succession plan.
Gou, one of the richest men in Taiwan, announced last week his intention to join the opposition Kuomintang's (KMT's) presidential primary, saying that the decision came from divine intervention from the Sea Goddess Mazu.
A source close to Hon Hai, who asked not be named, told CNA last week after Gou's announcement that he is not retiring anytime soon but is developing a succession plan for the company.
In a knee-jerk reaction to Gou's announcement on April 17, Hon Hai shares rose 2.11 percent at the end of the day's trading session. The stock, however, fell 4.36 percent in the following three trading sessions before staging a 0.57 percent technical rebound Tuesday.
As of 12:24 p.m. Wednesday, shares of Hon Hai had lost 1.36 percent to NT$87.10 on the exchange, where the weighted index was down 0.07 percent at 11,017.99.
The fluctuations in Hon Hai shares in recent trading sessions have caught the attention of investors, but Koo urged investors not to ignore the company's fundamentals.
In response to Gou's candidacy, international business media raised concerns about its possible impact on Hon Hai's operations.
The Nikkei Asian Review cited Joseph P.H. Fan, a professor at Chinese University of Hong Kong, as saying that Gou's presidential bid could pose a risk to the company.
"Gou is a strongman. The biggest concern will be whether his gigantic tech empire can be set in driverless mode and still run smoothly during his absence," Fan said in the report.
Hon Hai stressed, however, that all of the subsidiaries under the company's corporate umbrella operate independently and every unit is run by professional managers, indicating that Gou's shift into politics will not affect the day-to-day operations of these units.
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