This installation of PFAFF PFLASHBACK is part two of the popular History & Ownership Changes article that I wrote several months ago. Covering the years 1993-2000, it actually predates the time period covered in the last article. This is a rather bizarre and convoluted story, but clears up the many rumors of why PFAFF went bankrupt in late 1999, and why it was sold a few months later to Viking in April 2000.
In 1993, 72% of G.M. Pfaff AG (PFAFF) was sold to Hong Kong-based company Semi-Tech Global Ltd. for $73 million (USD). Semi-Tech Global was controlled by a Chinese-Canadian businessman named James Ting, who was one of Hong Kong's most successful businessmen at the time, accumulating a large empire worth five billion dollars. Semi-Tech Corp. (based in Ontario, Canada) owned Semi-Tech Global, along with various electronic companies including Singer N.V. (Singer), which was purchased in 1989 and rebranded.
In 1997, Ting had Singer purchase PFAFF from sister company Semi-Tech Global (which now owned 81% of PFAFF) for $150 million. The other 19% remained on the Frankfurt Stock Exchange. This seemed like an odd acquisition because Singer was not doing well financially, and in the prior year PFAFF generated $448 million in sales. Clearly something was not right.
In September 1999, both PFAFF and Singer filed for bankruptcy within days of each other. PFAFF's bankruptcy was partially due to Singer's debt. The Ontario-based Semi-Tech Corp., which owned around 50% of Singer's common stock, had filed for Chapter 11 protection one week prior. The company claimed Semi-Tech's bankruptcy was unrelated to that of PFAFF and Singer, but it was apparent all was not well within the group controlled by Ting.
Around this same time, multiple companies operated by Ting, including Singer and PFAFF, were all injected into a company called Grande Holdings. This company was also owned and operated by James Ting; along with Christopher & Stanley Ho (also of Hong Kong's wealthiest businessmen at the time). None of the shareholders or banks were notified, a highly illegal act that wasn't realized by the courts until many years later. As it turns out, there were bad bonds, bad behavior, and hundreds of millions of dollars had been stolen from Canadian shareholders. Vast sums of money went missing from the various companies owned by the Semi-Tech Corp. -- about $2 billion total in cash and assets.
The bankruptcy of Singer, PFAFF and the Semi-Tech Corp resulted in the collapse of Ting's empire. In 2000, with hundreds of millions (if not billions) in cash and assets still on hand, he was on the run and wanted in Canada, United States, and Hong Kong. He was eventually arrested in 2003 while getting off a plane in Macau, and imprisoned in 2005 on two counts of false accounting related to the fictitious purchase of a company called MicroMain Systems. He was released one year later following errors in the prosecution's case. Ting has not been seen since, with his whereabouts being unknown to this day.
It should be noted that in terms of product quality and production, amazingly nothing seemed to have changed at PFAFF despite all of the drama happening behind the scenes. Machines were still made in Germany and assembled in the Czech Republic by Zetina (these machines have "Made in Germany" on the serial plates). The quality during this era was very high. In fact, this time period is arguably when the best computerized models were produced, such as the 7550 and 7570; both of which are still highly sought-after models that have retained extremely steady values in the used sewing machine market.
Because PFAFF was essentially bankrupted due to a money laundering scheme by James Ting, Viking were able to quickly purchase the company, likely for a very small amount of money. Viking and PFAFF were then sold to the equity firm Kohlberg & Co. in 2006 to form SVP Worldwide (reuniting PFAFF and Singer), and in 2018 SVP was sold to another equity firm, Ares Management.
So there you have it, some arcane PFAFF history showing the dark side of the sewing world!