Activist Investor Targets This Taiwan Apple Supplier: Report

Hong Kong-based investment firm Argyle Street Management challenged Taiwan-based Apple Inc AAPL supplier Catcher Technology to improve its governance and release some of its $4.2 billion of net cash to shareholders, the Financial Times reports.

Catcher manufactures electronic casings for Apple devices made in China. Argyle holds ~1% of Catcher's shares. 

Argyle blamed Catcher for "hoarding cash" to support a "bloated" executive structure. The Hung family runs Catcher. 

In 2020, Catcher sold two units from its Chinese division that supplied Apple with iPhone casings for $1.43 billion to a smaller competitor, Lens Technology. 

Argyle argued that, despite the disposal, Catcher had paid a "low" dividend of NT$10-NT$12 per share for the past five years, totaling NT$42.95 billion ($1.43 billion), and said it would maintain that dividend level for the next three years. 

Hung family, including its chair Allen Hung, held 15% of Catcher's shares. 

Catcher said it was "currently in the stage of business transformation" and was diversifying into areas including manufacturing automotive parts and medical technology. "The cash position we kept is mainly for investment opportunities," the company said. 

In July, Taiwan prosecutors charged 14 people, including Catcher's R&D team members, for taking commercial secrets overseas. 

Lately, the global investor appetite for Taiwan has exhibited momentum, with foreign direct investment rising 275% to a 15-year high of $8 billion in the first half of 2022, thanks to its large industrial base and its status as a gateway to China. 

However, Taiwan's tech-reliant stock market presently battled a sell-off by global funds and fears of a U.S. meltdown. 

Apple recently warned its suppliers to label Taiwan- made components as "Taiwan, China," or "Chinese Taipei."