Sharp appoints Hon Hai executive as new president

OSAKA/TOKYO: Sharp Corp, restructuring under Taiwan’s Hon Hai Precision Industry Co Ltd, said yesterday that a close aide of Hon Hai chief Terry Gou would become president of the Japanese electronics maker as it tries to turn around after remaining in the red in fiscal 2015 for the second straight year.

Tai Jeng-wu, vice chairman of Hon Hai, also known by its trade name Foxconn, will replace Kozo Takahashi, becoming the first chief from outside the Osaka-based company, which has been stung by losses in its core liquid crystal display business.

Sharp will f ormally approve Tai’s appointment as well as investment from Hon Hai at its general shareholders’ meeting scheduled on June 23. He will assume the post after takeover procedures are completed.

Under the takeover deal signed last month, which marked the first acquisition of a major Japanese electronics maker by a foreign company, Hon Hai will pay 388.8 billion yen to take a 66% stake in Sharp and gain access to Sharp’s advanced LCD technology for its business expansion.

The payment is expected to be completed by the end of June.

Takahashi expressed hope at a press conference in Tokyo that Sharp’s new leadership under Tai will “boost its financial standing and work toward continuing business in a stable manner.”

“We received an extremely large investment from Hon Hai,” he said.

“With that in mind, the position of president should be held by (someone from) Hon Hai,” Takahashi said, also noting Tai’s power as second-in-command.

In its earnings report the same day, Sharp reported a group net loss of 255.97 billion yen for the business year ended March, compared with a loss of 222.35 billion yen a year earlier, as the company continued to incur losses in its LCD business.

The company’s operating loss in fiscal 2015 rose more than three times to 161.97 billion yen, compared with a loss of 48.07 billion yen in the previous year, on sales of 2.46 trillion yen, down 11.7%.

Sharp did not release a full-year earnings outlook for the current business year, saying it had to assess the outcome of the takeover deal first.

Takahashi said Sharp would take steps to return to profitability through measures such as streamlining its businesses and personnel worldwide, and maximising its growth areas and resources.

Sharp also announced that it would move its headquarters from the city of Osaka to a plant in Sakai, both in western Japan.

Asked about further job cuts at Sharp, widely reported as in the several thousands, Takahashi said a final decision had not been made regarding whether to solicit voluntary retirements and the matter is still being discussed with Hon Hai.

Sharp solicited around 3,000 voluntary retirements in 2012 as well as in 2015.