Taiwan's leading department store in management row


TAIPEI (AP) - Taiwan's leading department store chain said Monday it was negotiating with its Chinese partner, after a quasi-official Taiwanese agency said the chain was involved in a major management struggle with the Beijing-based company. 

Shauna Lee, a spokeswoman for Shin Kong Mitsukoshi of Taiwan, would neither confirm nor deny a report from the island's Strait Exchange Foundation that the Beijing Hualien Group is forcing the chain to hand over the management of its Beijing New Life Square branch, one of the top shopping spots in the Chinese capital. 

The Strait Exchange Foundation handles cultural and other exchanges with China in the absence of official ties. 

"I cannot respond ... because we are still in negotiations, and we need to give each other some space,'' Lee said. 

In a press release issued Sunday, the Strait Exchange Foundation said Hualian had unilaterally removed Shin Kong Mitsukoshi's Taiwanese managers from the Beijing store. 

It also said Hualian had reported the Taiwanese chain to Beijing police for committing crimes of an economic nature - Taiwan media said bribery was alleged - hoping to detain the chain's Beijing general-manager Steven Wu and take over the management. 

Lee said Wu returned to Taiwan on Saturday.She denied allegations that the chain had broken any laws. 

"Our company has always operated in a legal and proper manner, and there is never a question of (engaging in crimes),'' Lee said. 

Meanwhile, Taiwan's Mainland Affairs Council, the Cabinet-level government body charged with the implementation of China policy, appealed to Taiwanese businessmen to take extra caution on the mainland, and called on the Chinese government to protect legitimate Taiwanese interests there. 

"We urge the mainland authorities ... to deal with the (SKM) management controversy as soon and as efficiently as possible to avoid further negative impact,'' it said. 

Taiwan and China split amid civil war in 1949. Despite continuing political tensions, they enjoy close commercial relations, including more than US$80 billion (euro59 billion) in annual trade - overwhelmingly in Taiwan's favor - and Taiwanese investments on the mainland valued at over US$100 billion (euro72.9 billion). 

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