The legislature’s Economics Committee yesterday passed a preliminary review of an amendment to the Business Mergers and Acquisitions Act (企業併購法), which requires individual investors to report to the government when obtaining more than 5 percent of a listed company’s shares.
“The amended regulations simplify the process of merger and acquisition in Taiwan and protect investors with small investments in the market,” Minister of Economic Affairs John Deng (鄧振中) said.
According to the amendment, investors should file a declaration to the government regarding details of a stock procurement within 10 days after acquiring more than 5 percent of a listed company’s shares.
The regulations would keep the government and investors in the market up-to-date on the latest shareholding changes of a listed company, with improved transparency in equity markets, Chinese Nationalist Party (KMT) Legislator Lee Guei-min (李貴敏) said in the meeting.
Listed companies should host meetings to evaluate the details of a merger and acquisition plan, and then report the evaluation to their board and shareholders before convening a board meeting to make a decision, the amendment says.
A listed company has to gain approval from two-thirds of its shareholders if it is to be delisted from the stock market after a merger and acquisition, the amendment says.
The company should disclose merger and acquisition documents on a Web site designated by the government, it says.
KMT Legislator Sun Ta-chien (孫大千) said the revised regulations could prevent hostile takeovers and enable the government and investors to learn the source of funds for mergers and acquisitions.
The amendment also relaxed share transfer regulations between parent companies and subsidiaries, with a parent company allowed to merge its subsidiaries without shareholders’ approval.
The amendment is expected to pass its third reading before the end of this legislative session and to take effect at the beginning of next year at the earliest, a legislative official familiar with the matter told reporters after the meeting.
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