A spate of capital reductions by listed companies this year has prompted ruling Chinese Nationalist Party (KMT) lawmakers to introduce a draft bill that would ban firms from raising new funds via private placement within six months of cutting their capital.
If passed into law, the six-month ban will apply to all firms trading on the mainboard, the Taiwan Stock Exchange, and the over-the-counter GRETAI Securities Market.
KMT legislators Ting Shou-chung (丁守中) and Lo Shu-lei (羅淑蕾), who jointly sponsored the bill, told a hearing yesterday that the proposed amendment was designed to prevent major shareholders from using capital restructuring to purge enemies within the firms and sacrificing the rights and interests of small shareholders.
As of May 21 this year, 82 listed companies had announced plans to cut capital by an aggregate NT$300 billion (US$9.79 billion) to strengthen their financial health, the draft bill said.
Some firms then embarked on a capital increase by offering shares at a lower price to affiliates or investors via private placements, it said.
“The capital restructuring mechanism is designed to help firms strengthen corporate finances rather than provide a platform to carry out infighting,” Lo said. “A legal provision is needed to stem unfair practices as major shareholders have information unavailable to small shareholders.”
LCD panel maker Chunghwa Picture Tubes Ltd (華映) plans to shrink its capital by NT$99.8 billion, or 60 percent, while digital still camera maker Tekom Technologies Inc (智基科技) intends to reduce its capital by 97.03 percent, the draft bill said, without elaborating.
Small shareholders will suffer if these moves go through, it said.
Aware that capital reduction is sometimes essential for firms to improve their financial health, the bill proposes granting the Financial Supervisory Commission the power to spare companies from the six-month ban on a need basis.
The commission confirmed the need to regulate private placement and promised to conduct a thorough study of the issue.
The bill was forwarded to the legislature’s Finance Committee for review yesterday, but lawmakers said it was unlikely to be approved in the near future.
“The issue is more complicated than a six-month ban can cope with,” Lo said. “More revisions may be necessary to make the bill adequate and effective in protecting small shareholders.”
The current legislative session, due to end next month, is preoccupied with reviewing the central government’s fiscal budget.
Zhang Yazhou was sitting in the passenger seat of her Tesla Model 3 when she said she heard her father’s panicked voice: The brakes do not work. Approaching a red light, her father swerved around two cars before plowing into a sport utility vehicle and a sedan, and crashing into a large concrete barrier. Stunned, Zhang gazed at the deflating airbag in front of her. She could never have imagined what was to come: Tesla Inc sued her for defamation for complaining publicly about the vehicles brakes — and won. A Chinese court ordered Zhang to pay more than US$23,000 in
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held its first board of directors meeting in the US, at which it did not unveil any new US investments despite mounting tariff threats from US President Donald Trump. Trump has threatened to impose 100 percent tariffs on Taiwan-made chips, prompting market speculation that TSMC might consider boosting its chip capacity in the US or ramping up production of advanced chips such as those using a 2-nanometer technology process at its Arizona fabs ahead of schedule. Speculation also swirled that the chipmaker might consider building its own advanced packaging capacity in the US as part
‘NO DISRUPTION’: A US trade association said that it was ready to work with the US administration to streamline the program’s requirements and achieve shared goals The White House is seeking to renegotiate US CHIPS and Science Act awards and has signaled delays to some upcoming semiconductor disbursements, two sources familiar with the matter told reporters. The people, along with a third source, said that the new US administration is reviewing the projects awarded under the 2022 law, meant to boost US domestic semiconductor output with US$39 billion in subsidies. Washington plans to renegotiate some of the deals after assessing and changing current requirements, the sources said. The extent of the possible changes and how they would affect agreements already finalized was not immediately clear. It was not known
US President Donald Trump has threatened to impose up to 100 percent tariffs on Taiwan’s semiconductor exports to the US to encourage chip manufacturers to move their production facilities to the US, but experts are questioning his strategy, warning it could harm industries on both sides. “I’m very confused and surprised that the Trump administration would try and do this,” Bob O’Donnell, chief analyst and founder of TECHnalysis Research in California, said in an interview with the Central News Agency on Wednesday. “It seems to reflect the fact that they don’t understand how the semiconductor industry really works,” O’Donnell said. Economic sanctions would