Tightened rules on removing executives at publicly traded companies are to come into effect next month, barring board directors from proposing such dismissals through extraordinary motions, the Financial Supervisory Commission said yesterday.
Companies contravening the new rules are to face fines from NT$240,000 to NT$4.8 million (US$8,019 to US$160,385), the commission said, adding that the removal of chairpersons under illegal circumstances would not be recognized by the Minister of Economic Affairs (MOEA).
Currently, board directors can make notification of such motions seven days before a board meeting.
Photo: Kelson Wang, Taipei Times
As removing or electing a company’s head has significant effects, such a motion should not arrive without enough time to be discussed by board members, the Securities and Futures Bureau told an online news conference.
The tightened rules also apply to extraordinary board meetings, and the commission is to have the authority to specify under what conditions board directors can convene such meetings, the bureau said.
“Several companies suggested clearer conditions for holding extraordinary board meetings, as current regulations only apply to meetings in the case of emergency,” bureau Chief Secretary Kao Ching-ping (高晶萍) said.
However, defining what scenarios can be viewed as emergencies is complicated, Kao added.
The commission is planning to provide sample scenarios to companies as references, such as an emergency situation arriving when shareholders fail to elect a new head at an annual general meeting, she said.
In November last year, Solar Applied Materials Technology Corp (光洋科) reshuffled management, with Ma Chien-yung (馬堅勇) being removed as chairman by activist directors through an extraordinary motion.
The removal was dismissed by the MOEA in December, saying the case was not an emergency.
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