The Financial Supervisory Commission (FSC) yesterday fined several Chinese investors a total of NT$25 million (US$864,454) for illegally buying 130 million shares of Tatung Co (大同) last year through a financial institution in Singapore.
The commission declined to disclose the names of the investors, or whether they are individual or institutional investors.
It only said that they are not from Hong Kong Dragon Peak International Co Ltd (香港龍峰國際), which was fined three times for illegally purchasing Tatung’s shares in 2018 and last year.
Photo: Liao Chen-huei, Taipei Times
The commission found that the Chinese investors provided funds to a non-Chinese individual who opened an account at a financial institution in Singapore and began buying Tatung shares in May last year, Securities and Futures Bureau Deputy Director Kuo Chia-chun (郭佳君) told a news conference in New Taipei City.
The investors gradually increased their investment in Tatung over the following six months, ending up with a 5.87 percent stake in the household-appliance maker, Kuo said.
They spent an estimated NT$2.7 billion to buy the 130 million shares, given that Tatung’s average share price was about NT$20 during the period, corporate data showed.
The commission has barred them from exercising their rights as shareholders, which means they would not be able to vote at an extraordinary shareholders’ meeting to be held on Wednesday next week by Hsin Tung Co (欣同公司) and New Tatung Co (新大同公司), Kuo said.
The commission also mandated that they sell their Tatung shares in the next six months, Kuo said.
The FSC’s punishment surprised the local capital market, as Tatung, which controversially prohibited 27 investors from exercising voting rights at a shareholders’ meeting on Jun. 30, has been claiming that it had kicked out some of the investors for receiving funds from China, but its claims had not been verified by the regulator.
“We cannot verify if the Chinese investors we punished today were among the 27 investors, as we are not fully clear what happened at the company’s meeting on Jun. 30 and who the 27 investors were,” Kuo said.
The commission’s penalty on the Chinese investors does not mean that it turned to support Tatung’s controversial behavior on June. 30, as listed companies should not deprive its shareholders of their rights, Kuo said.
The commission did not punish the financial institution in Singapore that helped conduct the unlawful share purchases, as it has fulfilled its know-your-customer duty by confirming that the person who opened the account was not a Chinese citizen, Kuo said.
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