TAIPEI (CNA) — Taiwanese electronics and home appliance maker Tatung Co. clashed with a group of investors representing about 10 percent of company equity on Tuesday, amid accusations that it had manipulated the results of a board of directors’ election in order to maintain its operational control.
At its annual general meeting that day, the company successfully elected its preferred candidates for all six director seats and three independent director seats, extending the term of current Chairwoman Lin Kuo Wen-yen (林郭文艷).
Shortly after the vote, however, a group of investors led by Shanyuan Group Chairman Wang Kuang-hsiang (王光祥) and representing around 10 percent of Tatung’s equity accused the company of invalidating around 50 percent of its voting shares.
The investors alleged the company’s actions were related to their support for four new board nominees, including former China Steel Corp. Chairman Lin Wen-yuan (林文淵) as a director candidate and former New Power Party Legislator Huang Kuo-chang (黃國昌) as an independent director.
Tatung, for its part, said in a press conference Tuesday evening that it had suspended the voting rights of the investors for acquiring equity for M&A purposes without making a legal declaration, or for illegally receiving funding from China.
In response to the dispute, Securities and Futures Bureau deputy director Tsai Li-ling (蔡麗玲) said on Tuesday that her office will request that Taiwan’s central securities depository investigate the issue.
Meanwhile, the Securities and Futures Investors Protection Center said in a statement that government authorities are capable of determining whether the accounts of foreign investors are from China, adding that “no shareholder should be excluded from attending the AGM or have their voting rights denied.”
In an interview with CNA Tuesday, a Ministry of Economic Affairs (MOEA) official speculated that the shareholders could seek redress under Article 189 of Taiwan’s Company Act.
According to that law, in instances where the procedures for convening a shareholders’ meeting or adopting resolutions are contrary to Taiwanese law or the company’s Articles of Incorporation, a shareholder can file a petition to have resolutions annulled within 30 days after their adoption, the official said.
Tuesday’s dispute was the latest in a series of recent controversies for the manufacturer. Last year, three of its subsidiaries were delisted for poor financial performance and its former chairman, Lin Wei-shan (林蔚山), was sentenced to eight years in prison for aggravated breach of trust under the Securities Exchange Act.