(Yicai) Feb. 12 -- Wingtech Technology’s shares fell after the Chinese owner of Nexperia lost a court battle for control of the Netherlands-based semiconductor maker, prompting the firm to express its dissatisfaction and vow to protect its legitimate rights and interest “through all legal means.”

Wingtech [SHA: 600745] closed down 4.6 percent at CNY33.59 (USD4.90) per share in Shanghai today. The stock has fallen about 30 percent since the end of September, when the Dutch economic affairs ministry issued an order freezing Nexperia’s assets on national security grounds.

The Enterprise Chamber of the Amsterdam Court of Appeal upheld its emergency interim measures to suspend Nexperia’s former Chief Executive Zhang Xuezheng, who founded Wingtech, and transfer shareholder voting rights to an independent trustee, and also ordered a formal investigation into alleged mismanagement at the chipmaker, it announced yesterday.

In a statement released today, Wingtech noted its “profound disappointment and strong dissatisfaction with this ruling.” The court “has not revoked its previous erroneous decision, failed to lift the interim measures imposed on Nexperia, and nor has it restored Wingtech’s legitimate controlling rights as a shareholder of Nexperia,” Jiaxin-based company said.

“This is a self-contradictory and logically flawed ruling,” Wingtech said. “The Chamber, while acknowledging that the relevant matters are still subject to investigation, continues to uphold the interim measures based on one-sided and false information.

“While recognizing the need to expand the scope of the investigation to the current management, it condones the same interim management to remain in control of the company, essentially allowing them to continue their acts of undermining the company’s operations, carving up core assets and jeopardizing the stability of the global supply chain.

“The Enterprise Chamber’s erroneous interim measures are continuously and irreparably damaging a world-leading semiconductor enterprise that once operated excellently and made outstanding contributions, and harming the interests of tens of thousands of employees, more than 25,000 customers and the global industrial chain,” Wingtech said.

‘Restore Legitimate Rights’

Wingtech restated that the only way to save Nexperia, stabilize the global supply chain, and protect the legitimate rights and interests of all stakeholders is to immediately and unconditionally revoke all interim measures and restore Wingtech’s legitimate shareholder rights in the Nijmegen-based company.

Wingtech paid more than CNY30 billion (USD4.3 billion) to acquire Nexperia in 2019.

The trouble began at the end of last September, when the Dutch Ministry of Economic Affairs issued a ministerial order that froze the assets of Nexperia due to concerns over national security. Soon after that, the Enterprise Chamber announced emergency interim measures that further restricted Wingtech’s control of Nexperia, including removing Zhang and entrusting the Nexperia shares held by a Wingtech unit to an independent third party via fiduciary arrangement.

Although the Dutch government later said it would suspend the ministerial order, the court’s ruling has remained in effect.

The battle for control of Nexperia is weighing on Wingtech’s earnings. The company said late last month that it expects a steep loss for the fourth quarter of last year, following a profits in the first three quarters. Wingtech now forecasts a net loss of between CNY9 billion to CNY13.5 billion (USD1.3 billion to USD1.96 billion) for the full year.

Due to the dispute’s impact on Wingtech’s performance, China Chengxin International Credit Rating lowered its credit rating for the firm to A from AA- and revised the outlook to negative on Feb. 9, Wingtech said in a separate announcement yesterday.

Editor: Kim Taylor