Internet rumors and xenophobia cost the world’s biggest instant noodle maker Tingyi/Master Kong $2.4 billion

March 7, 2013 Leave a comment

Internet rumors and xenophobia cost the world’s biggest instant noodle maker $2.4 billion

By Gwynn Guilford — 4 hours ago

When most people think “ramen” they think Japan, but that association has landed Master Kong, the world’s biggest instant noodle maker, in a lot of hot water. The company, which is based in Taiwan and listed in Hong Kong, has lost some $2.4 billion in market capitalization after false rumors about its ownership circulated during Japan and China’s showdown over islands in the East China Sea. Japanese products and companies have been hit with damaging boycotts and protests since the crisis began last fall. That’s also when spurious rumors began circulating online that Master Kong’s parent company Tingyi was majority-owned by a Japanese company. Then a mass campaign encouraged a boycott  via internet and SMS, alleging that the Hong Kong-listed noodle-maker had donated ¥300 million to Japan’s purchase of the controversial islands, as reported by Chinese media blog Danwei, which also created this great chart: 

screen-shot-2013-03-06-at-4-52-36-pm

The smear campaign got its facts wrong—the Japanese instant food company Sanyo owns 33.18% of Tingyi, just behind Taiwan’s Ting Hsin, which owns 33.27%. And the company didn’t make any pledges to buy the islands for Japan. But the facts are little consolation to the company or its investors. Tingyi says the originator of what it calls “Japanese investment-gate” (link in Chinese) was its biggest competitor in the ramen market, Uni-President (which, for its part, denies involvement). But this just goes to show how volatile a mix of social media, misinformation, and xenophobia can be—even before you add the extra spicy packet.

Filed under Macro Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a comment