The Taiwan Monthly

Aug. 2020

Corporate Governance

Shareholder rights upheld

An issue arose at the annual general meeting (AGM) of TATUNG Co., Ltd. (code: 2371) (“Tatung”) held on June 30, 2020, in which a certain group of shareholders were denied their voting rights.

 

As such, Article 189 of the Company Act provides that in case the procedure for convening a shareholders' meeting or the method of adopting resolutions thereat is in contrary to any law, ordinance or the company's Articles of Incorporation, a shareholder may, within 30 days from the date of adoption of said resolution, enter a petition in the court for annulment of such resolution.

 

The Securities and Futures Investors Protection Center (SFIPC) sent six representatives to attend the Tatung AGM as shareholders to observe the proceedings, and expressed objections at the AGM that certain shareholders were denied their election ballots and voting rights. The SFIPC will exercise close scrutiny to developments, and carefully evaluate whether to issue the suit regarding the null and void of the resolution or annulment of such resolution of the shareholders’ meeting.

 

In addition to the SFIPC monitoring the situation, the Financial Supervisory Commission (FSC) mandated the Taiwan Stock Exchange (TWSE) and the Taiwan Depository & Clearing Corporation (TDCC) to take specific actions. The TDCC conducted an examination into the Tatung shareholder service. The TWSE requested Tatung to hold a press conference on the evening of June 30 to explain the reason why it denied the voting rights of this particular group of shareholders. The explanations given at the Tatung press conference failed to report the legal basis. It also failed to provide related evidence as to why the company arbitrarily denied the voting rights for certain shares, and did not distribute the election ballots to certain shareholders in its 2020 AGM. This overwhelmingly affects shareholder’s equity, which was found to have violated Article 49, Paragraph 1, Subparagraph 14 of the “Operating Rules of the Taiwan Stock Exchange Corporation.” The TWSE thus announced that Tatung listed securities will be under altered trading method starting on July 2, 2020.

 

Shareholders who consider their rights were infringed upon may also seek compensation through exerting their rights under article 189 of the Company Act stated above.

 

The press release for the above mentioned Shareholder Rights Upheld measures can be found at the links below:

1.The Financial Supervisory Commission (FSC)

https://www.sfb.gov.tw/en/home.jsp?id=78&parentpath=0,4&mcustomize=multimessage_view.jsp&dataserno=202007080001&aplistdn=ou=news,

ou=multisite,ou=english,ou=ap_root,o=fsc,c=tw&dtable=News

2.The Taiwan Stock Exchange (TWSE)

https://www.twse.com.tw/en/news/newsDetail/ff80808171e82745017305828150064e

3.The Securities and Futures Investors Protection Center (SFIPC)

https://www.sfipc.org.tw/MainWeb/Article.aspx?L=2&SNO=B5rjnASYGShbMgRGdxthEg==

4.The Taiwan Depository & Clearing Corporation (TDCC)

https://www.tdcc.com.tw/portal/en/news/content/4028979572b78271017309dbfd610022

 

For further inquiries, please contact Ms. Huang at yusan@twse.com.tw