It`s unclear how BenQ`s decision to "discontinue capital injection" into its German mobile phone subsidiary will impact its South African business.
BenQ announced last week from Taipei, Taiwan, that in order to "stem unsustainable losses", its board of directors had resolved to pump no further capital into the former Siemens business.
The subsidiary is considering filing for insolvency protection, a statement said, adding: "BenQ Mobile GmbH & Co OHG`s operations in Germany, including Munich, Bocholt and Kamp-Lintfort, may be affected. Other subsidiaries in Brazil and other locations are reviewing their financial position. BenQ will continue its branded mobile business in selected markets leveraging its existing R&D and manufacturing operations in Asia."
BenQ chairman KY Lee said that since October 2005 "we have committed and invested an inordinate amount of capital and resources into our German mobile phone subsidiary. We have worked alongside our German colleagues from the beginning and were able to achieve quite a number of milestones.
"Despite the progress achieved in reducing cost and expenses, widening losses have made this very painful decision unavoidable," continued Lee.
In June, the company announced it was investing R6 million to launch in SA following the withdrawal of the loss-making Siemens mobile phone brand from the country last year - and BenQ`s subsequent acquisition of Siemens` mobile phones division last October.
At the time, MD Zane Oostendorp said the company`s strategy would "initially aim for the mid- to high-end cellular market in SA, although we will introduce entry-level handsets later in the year".
He could not be reached for comment on Monday morning.
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