Taobao Taiwan to close after China-registration row
[TAIPEI] Online marketplace Taobao Taiwan said Thursday it will shut down its service at the end of the year after being told by the authorities to register as Chinese.
The move comes as relations between Taipei and Beijing have grown increasingly strained as the island looks to maintain its distance from the Asian superpower.
The company said it had decided to stop taking new orders around noon Thursday before officially going off-line on Dec 31 after "prudent evaluations".
Taobao Taiwan is registered as a foreign company through its operator - UK-registered Claddagh Venture Investment - but Taiwanese authorities deemed that it was in effect controlled by Chinese e-commerce giant Alibaba.
The island's Investment Commission in August fined Claddagh US$13,700 for violating local law governing Chinese investments and gave it six months to "rectify" the situation or withdraw its investment.
The commission started the probe after a former lawmaker claimed it was illegally operating on the island as it shared the same platform with Alibaba-owned Taobao.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Under Taiwan's regulations, a company is considered a Chinese investment if a Chinese entity owns more than 30 per cent of its shares or has "effective control" over its operations.
The commission ruled that Claddagh is in effect controlled by Alibaba, even though it holds less than 30 per cent of its shares.
Taiwan has stricter rules on investments from mainland China compared with other foreign countries, reflecting the lingering hostilities between the two sides, which split in 1949 after a civil war.
China still claims democratic self-ruling Taiwan as part of its territory awaiting reunification, by force if necessary.
It has stepped up pressure since President Tsai Ing-wen came to power in 2016 as she rejects its view that the island is part of "one China". Ms Tsai, who views Taiwan as "already independent" won re-election in a landslide in January.
The commission last year rejected a bid by a Hong Kong-led consortium to build a twin skyscraper in Taipei citing national security concerns, arguing the company was too heavily influenced by Beijing.
AFP
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Consumer & Healthcare
China bubble-tea chain Chabaidao plunges on Hong Kong debut
Japan’s 7-Eleven convenience chain targets aggressive global growth
Parental fury after stem cell bank ruins thousands of samples in Singapore
China’s bubble tea boom creates a half-dozen billionaires
US sues to block Coach owner’s US$8.5 billion buyout of Versace parent
Cutting the cord?: Events leading up to Cordlife’s MOH suspension and arrests of its directors, ex-group CEO