Taiwan Depository & Clearing Corporation

During May and June—the peak season for shareholders’ meetings—there are occasional reports of proxy solicitors offering money or other benefits in exchange for proxies in order to secure board seats, or signing high-value contracts with third-party solicitors. According to the Securities and Exchange Act, if proxy buyouts are reported and verified, the related proxies will be excluded from voting rights at the shareholders’ meeting, and violators may be fined ranging from NT$240,000 to NT$4.8 million, or be restricted from engaging in solicitation activities.

Authorized by the Financial Supervisory Commission (FSC), the Taiwan Depository & Clearing Corporation (TDCC) is responsible for auditing proxy solicitation during the shareholders’ meeting season. In line with policy and market oversight needs, TDCC dispatches personnel nationwide each year to conduct intensive audits, ensuring that solicitation practices comply with laws and regulations. Tzu-Ting Chen, Director Head of Intermediaries Compliance & Inspection, noted that in past disputes over company control, the market has occasionally questioned whether excessive solicitation fees constituted proxy buyouts. TDCC investigates any such reports and refers verified cases to the FSC for appropriate action. It also regularly holds educational seminars to reiterate that offering money or other benefits in exchange for proxies is strictly prohibited.

Tzu-Ting Chen further highlighted that, starting from 2023, in line with amendments to the Proxy Solicitation Rules by the FSC, TDCC has expanded audits to include proxy solicitation contracts. The corporation continues to urge market participants to strengthen legal compliance, aiming to enhance oversight of proxy solicitation and prevent the misuse of proxies as tools in company control struggles.

TDCC calls on the public to help combat illegal proxy buyouts. Such conduct is a serious offense. Citizens are encouraged to report violations with concrete evidence, such as recordings, videos, or photos. Verified whistleblowers may receive a reward of up to NT$200,000 after the FSC imposes penalties. If you suspect proxy buyout activities, please call the reporting hotline at (02) 2547-3733, or send relevant evidence to TDCC via email at tdcc@tdcc.com.tw or by mail to: 11F, No. 363, Fuxing N. Road, Songshan District, Taipei City.