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Cases
The resolution adopted at a shareholders’ meeting for removal of the ban on directors’ engagement in similar business is against the law and invalid

【Background】:
The Company held an extra shareholders’ meeting on May 14, 2007, during which it discussed the proposal for removal of the ban on directors’ engagement in similar business, but only roughly stated, “In regard of practical need, the Company decides to allow board members to be engaged on the similar business themselves or with other people in accordance with Article 209 of the Company Law.” The Company, nonetheless, failed to give substantial explanation about its decision for lifting the prohibition nor give clear definition of the similar business allowed for board members to be engaged in. In other words, the Company failed to explain the major points about this issue “one by one” to shareholders “in advance.” The resolution, in violation of Paragraph 1, Article 209 of the Company Law and the interpretation of the Ministry of Economic Affairs (MOEA), should be revoked or nullified.
【Reactive actions】:
1. The Center wrote to the Company on May 7, 2007, asking it to give substantial explanation about the major points “one by one” to shareholders “in advance” as their reference concerning how to discuss the proposal during the shareholders’ meeting.
2. During the extra shareholders’ meeting, the Company expressed that it would like to request shareholders’ consent for lifting the Prohibition on Business Strife on board members (including intuitional shareholders and their representatives except for those who also serve as full-time managers at the Company) as long as the business they are engaged in won’t influence the interest of the Company, starting from the new board members to be elected during the meeting.
3. As for this proposal, the Center expressed its objection on the spot during the meeting held on May 14, 2007. Later on June 11, 2007, the Center filed a suit against the Company to claim that the resolution should be revoked and nullified and it published a press release about this issue.
【Follow-ups】:
1. The Center unprecedently won the lawsuit on September 4, 2007 as the court ruled that the meeting’s resolution was invalid.
2. The Center’s winning in this lawsuit would help prevent other companies from making the similar resolutions for removal of the ban on directors’ engagement in similar business
3. The Center gathered information about other companies’ resolutions on the similar matters during their shareholders’ meetings and would propose suggestions to the regulatory agency as its reference.

Case (2)
【Background】:
During its shareholders’ meeting held in May 2007, the Company discussed how to remove of the ban on directors’ engagement in similar business, and roughly stated, “the Company, in accordance with Article 209 of the Company Law, lifts the Prohibition of Business Strife on the board members and representatives of the institutional board members of this Company, the Company’s affiliates, or the companies managed by the representative of any institutional board members of this Company.” The Company, nonetheless, failed to give substantial explanation about its decision for lifting the prohibition nor give clear definition of the similar business allowed for board members to be engaged in. In other words, the Company failed to explain the major points about this issue “one by one” to shareholders “in advance.” The resolution, in violation of Paragraph 1, Article 209 of the Company Law and the interpretation of the Ministry of Economic Affairs (MOEA), should be revoked or nullified.
【Reactive actions】:
1. The Center wrote to the Company on May 24, 2007, asking it to give substantial explanation about the major points “one by one” to shareholders “in advance” as their reference concerning how to discuss the proposal during the shareholders’ meeting. The Company made a reply to the Center, saying that its decision on this case doesn’t violate Article 209 of the Company Law.
2. The Center dispatched representatives to attend the Company’s shareholders’ meeting held on May 30, 2007, during which it expressed objection to this proposal. On June 26, 2007, the Center filed a suit against the Company to claim that the resolution should be revoked and nullified and it published a press release about this issue on the same day.
【Follow-ups】:
1. The Center won the lawsuit on November 9, 2007 as the court ruled that the resolution adopted at the Company shareholders’ meeting shall be null and void.
2. The Center’s winning in this lawsuit would help prevent other companies from making the similar resolutions for removal of the ban on directors’ engagement in similar business
3. The Center gathered information about other companies’ resolutions on the similar matters during their shareholders’ meetings and would propose suggestions to the regulatory agency as its reference. 

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Update Date:2015/12/27 12:57