The Securities and Futures Investors Protection Center would file a lawsuit for an order to dismiss Tatung Co (大同) chairwoman Lin Kuo Wen-yen (林郭文艷), as the firm has severely breached shareholders’ rights, agency chairman Chiou Chin-ting (邱欽庭) said yesterday.
If the center wins the lawsuit, Lin Kuo would be discharged from her position and barred from serving as a board member or supervisor of any firms listed on the Taiwan Stock Exchange, Taipei Exchange or emerging stock market in the next three years, Chiou told a news conference in Taipei.
“That would be a powerful punishment,” he said. “Although we do not know when justice would arrive, we know it will definitely arrive.”
Photo: Chen Yung-chi, Taipei Times
This is the first time that the center has fought a public company solely because it breached shareholders’ rights, as it usually focuses on firms that have engaged in criminal activity, such as falsifying financial reports, he said.
The center filed the suit as Lin Kuo severely breached shareholders’ rights and disrupted market order by revoking the voting rights of 27 shareholders who own a combined 53 percent stake in Tatung, Chiou said.
“We do not represent any side in the dispute over Tatung’s management, but we are here to defend the rights of regular shareholders,” he said.
Shareholders should be able to execute their rights unobstructed, he said.
“What Lin Kuo did was wrong and hence we do not think it was a fair election,” Chiou said.
Although it is the Ministry of Economic Affairs that decides whether to accept Tatung’s registration of its new board members or demand that it holds a new election, the center can do its part by filing the lawsuit, Chiou said, adding that although it might not resolve the situation swiftly, as a decision from a court would take a while, sooner or later Lin Kuo would pay for what she did.
Chiou said he was shocked and frustrated after Tatung held the election on Tuesday evening last week, as he could not imagine that something like this would happen in Taiwan.
“We have seen companies take possession of the ballots or make some votes invalid to win elections, but what Tatung’s management did was something we had never seen before — directly taking away shareholders’ voting rights,” he said.
It was sad to see a public company use “innovative measures” to disrupt corporate governance, he said.
Chiou rejected Tatung’s attorney Lai Chung-chiang’s (賴中強) remark that disputes regarding voting rights are part of a firm’s self-governance.
According to a Tatung filing with the Taiwan Stock Exchange, the company in May asked the Taipei District Court for a temporary injunction to suspend the voting rights of some shareholders, Chiou said.
“That statement clearly indicates that Tatung knew it had no right to cancel the voting rights of its shareholders, so it needed to apply for an injunction,” he said.
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