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Taiwan's Formosa Plastics Group in Transition: The Interplay of Succession, Inheritance and Family Strife

Published 19 Feb 2021
Reference 6613
Industry Chemicals
Region Global
Summary

The case covers the ongoing Wang family dispute over the inheritance of YC Wang, the billionaire founder of Formosa Plastics Group, one of Taiwan’s most prominent industrial conglomerates, who died in 2008 at the age of 91 without leaving a will. Within six months of his father’s death, his eldest son Winston Wong filed a lawsuit in the US to uncover the whereabouts of his father’s hidden assets, most of which he believed were unaccounted for in the inheritance settlement in Taiwan in 2009. He discovered that his father had transferred huge blocks of FPG shares to offshore trusts in Bermuda, the British Virgin Islands and the Cayman Islands (where they remain to this day). Having three wives and nine children, YC Wang took pains to maintain the family’s control over FPG after his death and to protect his vast fortune from inheritance taxes in Taiwan. He also went to great lengths to ensure that his philantrophic activities in education and healthcare would endure. The case explores these and other options open to founders who plan ahead to ensure their wealth is not squandered by succeeding generations.

Teaching objectives

The case narrates a series of complex events that would never have come to light were it not for the dogged determination of an eldest son to uncover the whereabouts of his father’s hidden assets. It is broken down into carefully constructed sections that instructors can sequence to ensure comprehension of the main teaching points, which are as follows: How family-owned global firms manage internal disputes without letting them tear the family (and the firm) apart; Why founders transfer their wealth to tax havens; The lengths to which owners will go to conserve their wealth, family control,and their philantrophic legacy.

Keywords
  • YC Wang
  • Formosa Plastics Group
  • Wang Family
  • Tax havens
  • FPG
  • Family business
  • Inheritance
  • Winston Wong
  • Chang Gung Memorial Hospital
  • Nan Ya Plastics
  • Offshore trusts
  • Succession
  • Family dispute
  • Tax avoidance
  • Q12021