Protections for the Rights of Minor Shareholders under Tender Offer Rules in Our Country

• Main Authors: Shu-How Chang, 張書豪
• Other Authors: Yuan-Ho Lai
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/00074220676421408285

碩士 === 銘傳大學 === 法律學系碩士班 === 101 === Due to highly liberalization and internationalization of the global economic market, there are more and more domestic and cross-national competitions among enterprises. Nowadays, all entrepreneurs try their best to stand out from the managing competitions. In order to achieve this goal, they commonly adopt strategic methods such as organization reforms, or strategic alliance with other enterprises. Among them, business combination is a strategic issue that they have to face, which makes business combination one of the most important trends and economic activities in the current capital markets. Three major rules of business combination, which are Financial Institution Combination Rules, Financial Institution and Business Combination Rules, have been made during 2000 to 2002 one after another, and have made amendments continually. Moreover, because there are many correlative amendments to the Enterprise Law to meet the requirements of the capital market, activities of domestic business combination or even cross-national business combination which were rare in the past now become popular with the liberalization of correlative rules. With great development of our technological industry, under the circumstances of changeable developments and global environment, an enterprise should try to adjust itself to the whole industry and meet the requirements, which will importantly help itself for long-term developments and business growth. While an enterprise makes business combination, it is very time-consuming and the results will influence the rights of many concerning parties. There are also lots of complicated and sophisticated procedures that need to be dealt with during the process. Take the combination of BENQ and the mobile department of SIEMENS AG in 2005 for example. The failure was claimed within a year, which caused great loss to the company and shareholders. In addition, when Carlyle Group acquired ET media, small shareholders regarded it as damage to their rights, and raised a lawsuit to the court. The court defined it as an unfair deal, and the company should compensate the shareholders. Last year, YAGEO Corp, the leading manufacturer of passive components cooperated with private equity fund KKR Investment to form Orion Investment Co, claimed to acquire YAGEO Corp at 16.1 NT dollars per share, with a total of 46.78 billion NT dollars. However, because 60% of the fund, approximately 28 billion NT dollars, was financed from banks, the Financial Examination Bureau offered evidence which showed worries about the capital market, rights of small shareholders, and information transparency to prove the weakening capital, and made the case denied by the Investment Commission Ministry of Economic Affairs. Seeing form the abovementioned cases, based on the aim of encouraging the enterprises to proceed combinations with other enterprise as a kind of organization adjustment and of promoting economic transformation and industrial development, it is also worth exploring if the Business Combination Rules in our country has sufficient capabilities to protect the rights of shareholders. Business combination has a great influence on the rights of shareholders. Although legitimately there are correlative protection institutions, there is still much to be improved, such as the example of damages to the rights of the shareholders. Under the current thinking and law designing frame of the separation of owners and managers, shareholders basically participate in none of the managing affairs and practical operation of decisions in an enterprise. However, shareholders are the ultimate bearers of managing results. In fact, shareholders usually uncoordinatedly lack information, and the shareholder meeting is usually controlled by big shareholders, which results in the situation that shareholders only have limited rights to make the final decision of the combination in the shareholder meeting. This thesis mainly explores the issue of protections for the rights of minor shareholders under the rules in our country. Firstly, it introduces the basic types of business combination, and then to explain the content of the rights of shareholders and the influences made by business combination on their rights. Later based on the designs of Tender Offer Rules and Compulsive Tender Offer Rules, it offers reflections and suggests systems that should be introduced, and then to give instructions and reviews on rules of protections for the rights of minor shareholders. It also analyzes the obligations and duties of directors and introduces business Judgment Rule. In addition, it introduces and reviews on the system of shareholder derivative suit, suggests adopting the system of direct claim of shareholder, and explains for the meanings of independent experts, purposes of establishment, and legitimate status. It additionally analyzes and reviews on the opinions proposed by independent experts, exposing range, and practical operations, as well as offers an introduction and analysis on the appraisal right. It suggested the appropriation of expanding appraisal right and the system of compulsive tender offer. The thesis ends with suggestions and a conclusion. In addition, the Ministry of Economy has already embarked on the renovation of Business Combination Rules, with highlights on simplification of combination process, the multiple projects of acquisition price and the limitation of divisions of correlative tax preference of the enterprise, and so on, which will be discussed in the conclusion part of this thesis. Activities of business combination play an important role in activation of the markets. Also, having appropriate organization adjustments to current economic situations can bring benefits for shareholders. Therefore, the designs of business combination rules cannot ignore the pursuit of economic efficiency and should take the conflicts and adjustments of the rights of the concerning parties into consideration as well, trying to strike a balance between them. As a result, business combination should seek economic efficiency and maintain justice and equality.