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|Other Titles: ||The Regulations Concerning the Right to Convene a Shareholders’ Meeting in the Battle of Corporate Control, and the Role of Supervi-sors:Take the Merger between Yuanta Core Pacific Securities and Fuhwa Financial Holdings for Example|
Faung, Kai-Lin Faung
Merger;Corporate control;Re-election;Board holding period requirement;Right to convene shareholders' meetings
|Issue Date: ||2014-09-30 17:49:13 (UTC+8)|
The Yuanta Group planned to set up a financial holding company through a merger between Yuanta Core Pacific Securities and Fuhwa Financial Holdings. Although the Yuanta Group acquired a substantial portion of the shares of Fuhwa Financial Holdings, the aforesaid merger did not proceed without challenges. One of the major reasons is Yuanta did not control a majority of Fuhwa’s board. Notably, another main shareholder, Central Investment Holdings, along with representatives of government shareholders, opposed such a merger. It then became dead-locked among major shareholders. To expedite the merger deal, Yuanta decided it should first acquire a majority of the board seats. The Yuanta director of Fuhwa Financial Holdings thus filed a motion as a share-holder, which required Fuhwa to call a special shareholders meeting to re-elect all directors within two months after the regular shareholders’ meeting. Yuanta further requested that such a motion be included in the notice of the regular shareholders’ meeting to be held on June 12th 2006.The regulations concerning the right to convene a shareholders’ meeting played a key role in the battle of corporate control. In the present case, Yuanta chose to request the directors to call a special shareholders’ meeting within a definite time to re-elect directors after the regular shareholders’ meeting. Comparing different articles govern-ing the shareholders’ right to convene shareholders’ meetings, one can find out when a majority shareholder is able to replace the incumbent managers and thus implement his own business strategy. The Yuanta case highlights several issues such as the holding period requirement of the right to convene shareholders’ meetings, the function of supervisors, the role to be assumed by government authorities, the infrastructures to implement the shareholders’ right to convene shareholders’ meetings and whether there is any regulatory structure that is more effective than convening a special shareholders’ meeting to re-elect directors. The fo-cus of this article is a discussion of how a major shareholder, who does not have control of the board, can force his will on the company, and the underlying policy regarding allocation of power under the ROC Corporation Law.
|Relation: ||法學評論, 108 , 213-258|
|Data Type: ||article|
|Appears in Collections:||[法學評論 TSSCI] 期刊論文|
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