A regulatory ruling yesterday on concerns about Chinese funds has dealt a setback to a group of investors seeking to gain control of Tatung Co (大同) in an ongoing management feud and proxy battle with the management team of the 99-year old company best known for its iconic electric rice cooker.
The Financial Supervisory Commission (FSC) announced that a number of stock purchases on behalf of Chinese clients by SinoPac Securities (Asia) Ltd (永豐金證券亞洲), a Hong Kong-based brokerage subsidiary of SinoPac Financial Holdings Co (永豐金控), breached rules governing cross-strait investments, as the purchases were not authorized.
In the run-up to a shareholders’ meeting next week, factions have been amassing stakes in a bid to capture board of directors seats.
Photo: Lee Ching-hui, Taipei Times
Local media reports said that about NT$2 billion to NT$3 billion (US$66.3 million to US$99.4 million) from China have been funneled to purchase Tatung shares on behalf of the activist investors.
Due to the ruling, the problematic shares do not confer voting rights, the commission said, although it declined to verify that the case involved Tatung shares.
Such revelations would lead to further market disruptions, the commission said.
Photo: Lee Ching-hui, Taipei Times
As a result of the diminished number of proxy votes, the activist investors’ plans to secure three out of the nine board seats have been thwarted, market observers said.
The commission said that the Chinese investors have been ordered to liquidate their stakes in Taiwanese companies within six months, while the Hong Kong-based brokerage’s Chinese clients would face fines of NT$600,000 in accordance with the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (臺灣地區與大陸地區人民關係條例).
SinoPac Financial would also be fined for the infraction as soon as next week, the commission said.
Tatung shares have swung wildly this year, peaking at NT$20.56 in February before retreating and closing at NT$10.75 yesterday.
The stock was languishing at about NT$5 in September last year, Taiwan Stock Exchange data showed.
Lin Hung-hsin (林宏信), chairman of a firm representing the activist investors, said that his faction would vote against capital increases and private placement proposals by the management team, as such moves would further harm shareholders’ interest by diluting shares.
Despite prolonged operating losses and an absence of dividend payouts since 2001 — as well as allegations of mismanagement, fraud and embezzlement — the management team led by Tatung’s founding Lin (林) family — which does not include Lin Hung-hsin — has continued to exert control over the company without regard for the interests of shareholders, he said at a news conference in Taipei yesterday.
Lin, who has previously rejected rumors about his ties to Chinese funds, said the fight with Tatung is not over for activist investors.
They would continue to increase their stakes in Tatung to prepare for the next board election in three years, he said.
CELEBRATION: The PRC turned 75 on Oct. 1, but the Republic of China is older. The PRC could never be the homeland of the people of the ROC, Lai said The People’s Republic of China (PRC) could not be the “motherland” of the people of the Republic of China (ROC), President William Lai (賴清德) said yesterday. Lai made the remarks in a speech at a Double Ten National Day gala in Taipei, which is part of National Day celebrations that are to culminate in a fireworks display in Yunlin County on Thursday night next week. Lai wished the country a happy birthday and called on attendees to enjoy the performances and activities while keeping in mind that the ROC is a sovereign and independent nation. He appealed for everyone to always love their
FIVE-YEAR WINDOW? A defense institute CEO said a timeline for a potential Chinese invasion was based on expected ‘tough measures’ when Xi Jinping seeks a new term Most Taiwanese are willing to defend the nation against a Chinese attack, but the majority believe Beijing is unlikely to invade within the next five years, a poll showed yesterday. The poll carried out last month was commissioned by the Institute for National Defense and Security Research, a Taipei-based think tank, and released ahead of Double Ten National Day today, when President William Lai (賴清德) is to deliver a speech. China maintains a near-daily military presence around Taiwan and has held three rounds of war games in the past two years. CIA Director William Burns last year said that Chinese President Xi Jinping
MAKING PROGRESS: Officials and industry leaders who participated in a defense forum last month agreed that Taiwan has the capabilities to work with the US, the report said Taiwan’s high-tech defense industry is to enhance collaboration with the US to produce weapons needed for self-defense, the Ministry of National Defense said in a report to the Legislative Yuan. Deputy Minister of National Defense Hsu Yen-pu (徐衍璞) discussed building regional and global industry alliances with US partners at the US-Taiwan Defense Industry Conference in Philadelphia held from Sept. 22 to Tuesday last week, the ministry said in the declassified portion of the report. The visit contributed to maintaining bilateral ties, facilitated Taiwan’s efforts to acquire weapons and equipment, and strengthened the resilience of the two nation’s defense industries, it said. Taiwan-US ties
CONCERNS: Allowing the government, political parties or the military to own up to 10 percent of a large media firm is a risk Taiwan cannot afford to take, a lawyer said A Chinese Nationalist Party (KMT) legislator has proposed amendments to allow the government, political parties and the military to indirectly invest in broadcast media, prompting concerns of potential political interference. Under Article 1 of the Satellite Broadcasting Act (衛星廣播電視法), the government and political parties — as well as foundations established with their endowments, and those commissioned by them — cannot directly or indirectly invest in satellite broadcasting businesses. A similar regulation is in the Cable Radio and Television Act (有線廣播電視法). “The purpose of banning the government, political parties and the military from investing in the media is to prevent them from interfering
RSS