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Company fails to state related items of private placement for convening shareholders’ meeting in meeting notice

【Background】:
The Company held a shareholders’ meeting on June 23, 2006, during which it discussed the Company’s project for issuing common shares through private placement. Under requirements for private placement, the Company should state the price-setting date, pricing formula, as well as reasons and purpose for the private placement project in the meeting notice. The Company, nonetheless, didn’t mention any of these in its meeting notice and promptly passed the project during the shareholders’ meeting. It’s a significant flaw. The Center, therefore, proposed several reactive measures as follows.
【Reactive actions】:
1. The Center, after receiving the Company’s notice for holding the shareholders’ meeting, has asked the Company to clarify some controversial points about its private placement project. During the shareholders’ meeting, it raised questions about the project for five times and pointed out that it’s a significant flaw for the Company to fail to follow the private placement requirements for companies to state the related items for convening the shareholders’ meeting in meeting notice.
2. The regulatory agency redressed the Company’s flaw in its private placement project in July, 2006. In regard of the illegitimate meeting procedure, the Center appealed to the court for revoking the meeting’s decision so as to protect investors’ interest.
【Follow-ups】:
1. The Center won the lawsuit in the first instance of this case on September 21, 2006, but the court of the second instance concluded that the procedure of first instance had the flaw on February 13, 2007, and returned the case to the court of the first instance on May 16, 2007 in regard of the flaws in the litigation process .
2. The Company made a decision on its private placement project during the shareholders’ meeting held in June , 2006, but the decision has not been approved for over one year. Pursuant to Article 43-6, Paragraph 7, of the Securities and Exchange Act, the decision has become invalid. In this case, the Center has substantially fulfilled its mission for protecting the interest of investors.  

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Update Date:2015/12/27 12:59