However, one official told the Taipei Times that Article 167 of the Company Law only stipulates that a company may not buy its own stock. Many companies have exploited this loophole in the law by setting up affiliate companies. The affiliate companies then buy the parent company's stock to manipulate its stock price.
"We suggested to the MOEA a long time ago that it change the law, but they never did," said the official.
When asked whether or not Taiwan Fertilizer's action of lending money to its four affiliates was illegal, the official told the Taipei Times that according to Article 15 of the Company Law, a company may not loan money to its affiliate unless the two companies are doing business and the loan is necessary.
See also:
Analysis
RSS