Fri, May 20, 2011 - Page 11 News List

Tekcore asked to explain change in board election

BATTLE FOR CONTROL:Stakeholder Everlight accused Tekcore of putting the interests of shareholders and investors at risk and threatened to pull out its orders

Staff Writer

The Ministry of Economic Affairs yesterday sought to resolve the boardroom dispute over Tekcore Co (泰谷光電), asking the LED chipmaker to explain why it had postponed a board election scheduled for next month.

The ministry’s Department of Commerce said Tekcore had been instructed to provide an explanation by May 30, adding that it would also look into a complaint from one of its stakeholders — LED chip packager Everlight Electronics Co (億光電子) — before rendering a verdict.

Tekcore’s boardroom dispute has recently grabbed headlines, with the company reportedly holding off on a board election next month to secure its management control.

Everlight has a 15.9 percent stake in Tekcore, while Epistar Corp (晶元光電), the nation’s biggest LED chipmaker, has a 19.9 percent stake.

With a combined shareholding of about 36 percent, Everlight and Epistar were planning to gain control over Tekcore if a new board was elected at the annual general meeting on June 28, media reports said.

However, Tekcore’s board on Wednesday decided to remove the board election from the agenda of its shareholders’ meeting, prompting Everlight to file a complaint with the Department of Commerce, accusing Tekcore of violating the Company Act (公司法).

The department said Everlight had asked Tekcore to hold an extraordinary shareholders’ meeting before June 28 in order to put the board election back on the agenda.

Everlight chairman Robert Yeh (葉寅夫) has publicly condemned Tekcore’s move, saying it has put the interests of shareholders and investors at risk.

Yeh added that Everlight might withdraw its orders and file a patent infringement suit against Tekcore.

Tekcore said in a filing to the Taiwan Stock Exchange yesterday that it would discuss the nomination of independent directors, board members and supervisors at its next board meeting.

The company also downplayed Everlight’s threat, saying that while Everlight’s orders accounted for 20.9 percent of its sales in January, the figure dropped to 5 percent, 5.9 percent and 3.2 percent in February, March and last month respectively.

Department of Commerce Director-General Yeh Yun-lung (葉雲龍) said the department might approve Everlight’s plan on holding an extraordinary shareholders’ meeting if Tekcore did not come up with a solution to the dispute by May 30.

Shares of Tekcore were unchanged at NT$32.30 in Taipei trading yesterday, while those of Everlight slid 1.5 percent to NT$80.80 and Epistar’s rose 2.2 percent to NT$88.60.

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