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Company, by raising occasional suggestion during shareholders’ meeting, revises corporate charter to change the means for electing directors and super

【Background】:
The Company. convened an regular shareholders’ meeting in August 2007, during which certain shareholders raised an occasional suggestion for adding Article 13-1 of the corporate charter and related regulations to change the means for electing directors and supervisors from the original “Cumulative Voting” to “Block Vote.” They also suggested that the new means should be applicable to the following voting for directors and supervisors during that shareholders’ meeting. The occasional suggestion, which was not stated in the meeting notice or meeting agenda, was like a surprise attack to the shareholders to make them have no sufficient time to consider about the suggestion before discussing it at the meeting and trickily allowed the shareholders` meeting to revise the corporate charter. The Company reached the decision under a situation that most shareholders were not fully aware of this suggestion, and that would seriously influence the interest of the shareholders. Besides, shareholders who authorized others to attend the meeting couldn`t express their opinon to the occasional suggestion. Furthermore, the means of “Block Vote” would derive the right of certain shareholders from participating the management of the company. The SFIPC therefore took actions in reaction to the resolution at shareholders` meeting on this project.
【Reactive actions】:
1. The SFIPC, expressed its objection to the occasional suggestion mentioned above during the shareholders’ meeting. and convened a consulting meeting in September. After comprehensive discussion with experts and scholars, the SFIPC believed the resolution adopted at shareholders` meeting to revise the corporate charter through occasional suggestion during the regular shareholders’ meeting is against Article 172 of the Company Law, and to count the votes who didn`t know this project previously and authorized others to attend the shareholders` meeting is in violation of the “Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies (hereafter refers to as the Proxy Regulations).”
2. The SFIPC, pursuant to Article 189 of the Company Law, appealed to withdraw both of the resolution adopted at shareholders` meeting on this project and the following election of new directors and supervisors in late September, and published a news release about this case on the same day.
【Follow-ups】:
1. The SFIPC, in a bid to help companies develop healthy corporate governance system and protect the interests of investors, wrote to the regulatory agencies to call for revisions to the Securities and Exchange Law and the Company Law.
2. The SFIPC-proposed draft revision to the Proxy Regulations was held by the regulatory agencies as reference. The SFIPC will continue to propose revisions to the relevant laws or regulations as reference to the regulatory agencies.
3. Recognizing that the means of “Block Vote” would hinder the interest of certain shareholders, the Ministry of Economic Affairs (MOEA) has been drafting a proposal to request the Company Law to change it back to the original “Cumulative Voting” system in accordance with Article 198 of the Company Law. It’s reported that the proposal is now under review of the Executive Yuan.  

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Update Date:2015/12/27 12:56