Tatung Company recently prevented shareholders from voting during a shareholders' meeting, saying they had violated the Business Mergers and Acquisitions Act. The Ministry of Economic Affairs subsequently rejected Tatung's application to register new board members.
The controversy over Tatung Company's management rights continues to simmer. After the Ministry of Economic Affairs received a negative opinion as a response from the Financial Supervisory Commission, it convened a press conference to announce that it has rejected the company's application to register newly-elected board members on the three principles of no registration, no compulsory reelection, and no dismissal.
The company (Tatung) has already issued a total of 2.3 billion (shares). If we deduct the 1.2 billion shares that don't have the right to vote under the Business Mergers and Acquisitions Act, Act Governing Relations Between the People of the Taiwan Area and the Mainland Area, the Civil Code, and other laws, the actual number with participating rights is 990 million shares. The participation threshold was not met. The Company Act says over half of shareholders must be present.
Tatung held a general shareholders' meeting on June 30 to elect board members. During the meeting, Chairperson Lin Kuo Wen-yen cited the Business Mergers and Acquisition Act, said the market faction wanted an M and A, and negated the right to vote of 53 percent of shareholders. The corporate faction was thus able to get nine board seats. The stock exchange said it was protecting investor rights and benefits when it limited company stocks to cash trading on July 2. The Securities and Futures Investors Protection Center said it would file a lawsuit to dismiss Lin Kuo. On July 9, the MOEA rejected Tatung's application to register board members. It said the Company Act stipulates that shareholders have the right to vote and elect, and any shareholder's equal exercise of shareholder rights should be protected.
Under the premises of the authorities not taking punitive actions, not expressing opinions, and not having any court decisions, the company should not unilaterally deprive the shareholders' right to vote.
After Tatung shares were limited to cash trading on July 2, the share price plummeted. It started trading at NT$19.15 on July 9, and hit the daily limit several times following the MOEA's announcement of follow-up actions. FSC Commissioner Huang Tien-mu said the FSC will continue to maintain market order.