The Financial Supervisory Commission (FSC) is to tighten its review of listed companies’ capital reduction plans after dozens of firms announced reductions in the first quarter, the commission said yesterday.
The commission requires certified public accountants to justify the necessity of a capital reduction and its effects on a company’s financial structure if it plans to cut capital by more than 50 percent.
Given a rise in the number of local companies that have applied to reduce capital, the commission has asked the Securities and Futures Investors Protection Center to help review the plans on a case-by-case basis, Securities and Futures Bureau Director-General Sam Chang (張振山) told a meeting of the legislature’s Finance Committee in Taipei yesterday.
Photo: Tu Chien-jung, Taipei Times
The FSC expects to announce the results of its review in two weeks, Chang said.
The change comes after Chinese Nationalist Party (KMT) Legislator Alex Fai (費鴻泰) asked the commission whether it was suspicious that more companies announced capital reductions in the first quarter.
Eighteen listed firms announced capital reductions totaling NT$57.48 billion (US$1.98 billion) as of the end of last month, nearly as high as for the whole of 2018, Fai said.
Unlike companies’ previous capital reductions, which mostly correlated with rising share prices, the announcements in the first quarter constrained share prices, as in most cases the companies’ share prices fell the next day, Fai added.
Rumors had circulated that some companies aimed to reduce capital to dilute stakes held by minor shareholders, a move that would help certain players gain boardroom control, he said.
Such moves could be possible, and the commission would keep a lookout for this behavior in its review, Chang said.
A capital reduction is just one tool that companies can use to adjust their capital structure, and does not necessarily mean anything more, Chang said, adding that whether such an announcement results in a company’s share price rising or falling depends on how investors interpret the move.
The commission bars companies from conducting capital injections for one year following a capital reduction, Chang said.
Some lawmakers had recommended that the FSC should lengthen the period to three years, but it might be inappropriate as corporate management requires flexibility, Chang said.
JITTERS: Nexperia has a 20 percent market share for chips powering simpler features such as window controls, and changing supply chains could take years European carmakers are looking into ways to scratch components made with parts from China, spooked by deepening geopolitical spats playing out through chipmaker Nexperia BV and Beijing’s export controls on rare earths. To protect operations from trade ructions, several automakers are pushing major suppliers to find permanent alternatives to Chinese semiconductors, people familiar with the matter said. The industry is considering broader changes to its supply chain to adapt to shifting geopolitics, Europe’s main suppliers lobby CLEPA head Matthias Zink said. “We had some indications already — questions like: ‘How can you supply me without this dependency on China?’” Zink, who also
At least US$50 million for the freedom of an Emirati sheikh: That is the king’s ransom paid two weeks ago to militants linked to al-Qaeda who are pushing to topple the Malian government and impose Islamic law. Alongside a crippling fuel blockade, the Group for the Support of Islam and Muslims (JNIM) has made kidnapping wealthy foreigners for a ransom a pillar of its strategy of “economic jihad.” Its goal: Oust the junta, which has struggled to contain Mali’s decade-long insurgency since taking power following back-to-back coups in 2020 and 2021, by scaring away investors and paralyzing the west African country’s economy.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) received about NT$147 billion (US$4.71 billion) in subsidies from the US, Japanese, German and Chinese governments over the past two years for its global expansion. Financial data compiled by the world’s largest contract chipmaker showed the company secured NT$4.77 billion in subsidies from the governments in the third quarter, bringing the total for the first three quarters of the year to about NT$71.9 billion. Along with the NT$75.16 billion in financial aid TSMC received last year, the chipmaker obtained NT$147 billion in subsidies in almost two years, the data showed. The subsidies received by its subsidiaries —
BUST FEARS: While a KMT legislator asked if an AI bubble could affect Taiwan, the DGBAS minister said the sector appears on track to continue growing The local property market has cooled down moderately following a series of credit control measures designed to contain speculation, the central bank said yesterday, while remaining tight-lipped about potential rule relaxations. Lawmakers in a meeting of the legislature’s Finance Committee voiced concerns to central bank officials that the credit control measures have adversely affected the government’s tax income and small and medium-sized property developers, with limited positive effects. Housing prices have been climbing since 2016, even when the central bank imposed its first set of control measures in 2020, Chinese Nationalist Party (KMT) Legislator Lo Ting-wei (羅廷瑋) said. “Since the second half of
RSS