Chair of Lao Dong Beef Noodles steps down after rumors
By Evelyn Tsai, Special to The China Post
August 8, 2014, 12:00 am TWN
Liu Cheng-hsiung (劉正雄), chairman of Lao Dong Beef Noodles (LDBF, 老董牛肉麵), yesterday announced his decision to step down as the firm's chairman and apologized for any harm sustained by the investing public over rumors that the company is poised to enter a partnership with Hon Hai Precision Industry Co. (鴻海精密).
Liu is accused of lying to shareholders by saying that LDBF might potentially cooperate with Hon Hai, as well as falsely claiming the backing of Hon Hai Chairman Terry Gou, which netted the company NT$100 million as investors rushed to purchase LDBF shares.
Reports indicate that an investor, surnamed Lin, had questioned the Hon Hai partnership claim, and had lodged a complaint against Liu with market regulators. Lin said that Liu fooled him two years ago with pictures of his visit to Hon Hai's headquarters, drawing him to invest in the restaurant chain based on a fabricated partnership initiative with the world's largest electronics manufacturer.
In response to Lin's claims, Liu pointed out that the stocks Lin possessed were traded through an acquainted shareholder 1 year and 8 months ago, and that the pictures of him visiting Hon Hai were taken this February. According to Liu, Lin's accusations are unfounded as he has failed to produce the exact dates of the events listed in his claim.
In light of current circumstances, Liu said that the forthcoming business expansion plans in China have been temporarily halted, adding that the company needs to prioritize resolving business disputes and shareholders' dissatisfaction in Taiwan first.
Relations Between LDBF and Gou
In 2008, Liu's specialty, beef noodles, was chosen to be featured at Terry Gou's wedding banquet. Since then, the growing popularity of LDBF has brought fame and success to the company. As a result, Gou's name became linked with the chain beef noodle restaurant. Liu yesterday apologized for sullying Gou and Hon Hai's names.
Hon Hai issued a statement clarifying the matter on July 27, in which it explicitly rejected all rumors of ongoing partnership and business dealings between the company, Terry Gou and LDBF.