At 'Hello Kitty' airline EVA, investors fret after chief ousted in family feud
By Faith Hung
TAIPEI (Reuters) - A battle among brothers for control of one of Taiwan's biggest conglomerates boiled over into the public domain last week when EVA Airways ejected its chairman. Now investors in a rising star among Asian airlines fear they, too, may get burned.
Chang Kuo-Wei, also a pilot for a carrier he had led since 2013, had just flown an EVA jet to Singapore when he was ousted at a March 11 board meeting called by his three older brothers, according to an EVA spokesman and Chang's lawyer. No reason for the move was given when EVA announced it later that day.
At stake for the Chang family is control of shipping and transport giant Evergreen Group, whose founder and patriarch Chang Yung-fa died in January. For institutions invested in EVA, like the Vanguard Group and BlackRock, the question is simpler: will the $2 billion airline stick to long-haul expansion plans and record new jet orders mapped out by its former boss?
"Investing in a company is investing in its leader," said a fund manager at one of EVA's top 30 investors who declined to be identified by name. "You buy Hon Hai Precision shares because of (Foxconn founder) Terry Gou. You buy EVA stocks because of Chang Kuo-wei."
Widely referred to as 'KW', Chang Kuo-Wei wasn't available for comment. His lawyer, Daniel Song, said the 46-year-old who steered the carrier's recent strategy - including intensifying a livery and design tie-up with the 'Hello Kitty' cartoon character - is now "taking a rest" at an undisclosed location.
Chang has no plans to seek reinstatement at the carrier, in which he has a personal stake of about 12 percent, the lawyer said, but is taking legal action over broader issues surrounding the Chang family fortune. EVA accounts for the bulk of Evergreen's profit amid a downturn in the shipping industry.
Officials at EVA and Evergreen said the other Chang brothers could not be reached, and would not want to comment on family business.
After shedding as much as 5 percent after the departure, shares in the firm, in which Chang and his brothers own 44.5 percent in total, are now just 2 percent below their March 11 close as EVA pledges continuity. Continued...