Issuers Arbitrarily Deny Shareholders’ Voting Rights Banned from Conducting Its Own Shareholder Services

2020/06/30

Tatung Company (Tatung Co.) convened its 2020 annual general meeting (AGM) on June 30. At the meeting, candidates for all six director seats and three independent director seats were elected. When reviewing the shareholder registration process, Taiwan Depository & Clearing Corporation (TDCC) found that the voting rights of some shareholders and proxy solicitors with powers of attorney (POA), including natural persons, legal persons, and representatives of investment accounts, were blocked at their registration without proper investigation of supervisory authorities. TDCC took prompt action by issuing a notification to the General Counsel and the head of shareholder services at Tatung Co. In such notification, TDCC stated that issuing companies shall provide ballots for motions and ballots for elections in accordance with regulations and shall not infringe shareholders’ rights by arbitrarily deny their voting rights. Should relevant regulations be contravened, TDCC will report such violation to the competent authority and suggest Tatung Co. be forbidden from conducting its own shareholder services.

Whether shareholders attend shareholders’ meetings in person or by proxy, issuing companies should give them ballots for motions and ballots for elections. Issuing companies will be severely affecting the rights of shareholders who attend meetings by proxy if the said companies refuse to offer ballots for motions and ballots for elections equivalent to solicitors’ shares after solicitors’ information has been announced and their identity has been recognized.

The fact that Tatung Co. withheld ballots for motions and ballots for elections at shareholders’ and solicitors’ registration may have breached relevant regulations, according to TDCC. The competent authority may take punitive measures or demand violating companies to take correctional measures, and the said companies will not be allowed to run their own shareholder services pursuant to Article 6 of Regulations Governing the Administration of Shareholder Services of Public Companies, which stipulates that issuers shall handle shareholder services in compliance with laws and regulations as well as the provisions of their internal control systems. Shareholders are also entitled to file a petition to the court to have resolutions annulled under Article 189 of Company Act if they think their rights are compromised.