TAIPEI (Taiwan News) — Outsiders won the power struggle for control of the board of troubled appliance maker Tatung Co. Wednesday (Oct. 21) after the group was deemed to have received illegal Chinese investment.

Founded in 1918, Tatung is best known in Taiwan for its rice cookers. However, it has been struggling with two ailing affiliates, panel maker Chunghwa Picture Tubes Ltd. (中華映管) and solar wafer producer Green Energy Technology (綠能).

A “market faction” of outsiders has emerged to wrest control over Tatung away from the “company faction” of its founders, the Lin family, and Chairwoman Lin Kuo Wen-yen (林郭文艷) in particular.

On Oct. 13, the results of an investigation showed that Chinese interests held 5.87-percent share in the company. This resulted in Tatung being fined NT$25 million (US$872,000) and a renewed call for a board election.

According to the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, "any individual, juristic person, organization, or other institution of [China], or any company it invests in any third area may not engage in any investment activity in the Taiwan Area" until it receives permission from the relevant authorities.

In Wednesday’s vote, the market faction won seven seats on the board, while the company faction held on to only two, including one for Lin Kuo.

According to Taiwanese law, the new board will have to meet for the first time within 15 weeks to select a new chairperson. A former Democratic Progressive Party official not related to the founding family, Lin Wen-yuan (林文淵), is widely expected to become Tatung’s new chairman. He was previously chairman of China Steel Corporation and Taiwan Power Corporation, CNA reported.