Chimei Innolux has faced even more bad news after it was hit for $78 million following a breach of competition rules.
A US court hit Samsung and Chimei with fines over a violation of a fair trade case that has invoked fines in Korea and Europe too. CFO Chen Yien-sung noted that the firm will be listing the cost of the large fine in its financial statements for the seconds and third quarter in order to move on swiftly, according to CENS.
It could hardly come at a worse time for Chimei, which was on the receiving end of fines from Korean authorities along with a host of other panel firms.
Samsung was the hardest hit at the time, at $86 million, while Chimei was stung to the tune of $1 million. According to Chen the million dollar fine is manageable, but it is likely the significantly larger fine from American trade authorities which will form a more sizeable dent in Chimei’s pockets.
And Chimei is hardly rolling in it at the moment. The panel company, just like domestic rival AUO, has seen one poor result after another with the industry in general on a downward spiral.
Talk has persisted about a move to merge the two, with Taiwanese authorities playing a rather forceful matchmaker. And if Chimei was reluctant to buddy up with AUO before, even greater financial woes are unlikely to strengthen its case in the wake of the recent resignation of chairman Liao Ching-siang.
While Liao’s resignation was supposedly due to ill health it quickly prompted speculation that there were other forces at work behind the scenes.
According to an analyst speaking to TechEye this was likely to lead to greater involvement in the running of Chimei from stakeholder Foxconn and Hon Hai.
Foxconn has denied that such a move is underway, with chairman Terry Gou asserting that he holds only an 11.06 percent stake in Chimei, according to Digitimes. However, he does also own a personal stake of 2.91 percent in the company separate from Foxconn’s financial involvement.