TAIPEI (Taiwan News) — The Taipei District Court ruled on Thursday (Dec. 17) that the chairwoman of Taiwanese home appliance brand Tatung Co. (大同) should be discharged from her position for abusing her power.
In a highly controversial shareholders' meeting on June 30, Lin Kuo Wen-yen (林郭文艷), one of the founders of Tatung, retained full control of the nine-member board by blocking several shareholders, who collectively hold a 53-percent stake in the company, from exercising their right to vote. She accused them of illegally receiving funding from China.
The Ministry of Economic Affairs later determined that Lin Kuo had contravened the law and that the result of the June 30 meeting was invalid. It also approved Tatung investors' application to hold an extraordinary shareholders' meeting to elect new board members.
The Securities and Futures Investors Protection Center in July filed a lawsuit to dislodge Lin Kuo as chairwoman and bar her from serving as a board member or supervisor for any company listed on the Taiwan Stock Exchange or Taipei Exchange for three years. The agency said this was the first time it had targeted a public company for breaching shareholders' rights, as it generally focuses on firms that engage in criminal activity.
The Taipei District Court said Thursday that further investigation is required to verify Lin Kuo's allegation about shareholders' Chinese associations. However, the Tatung chairwoman did break the law by depriving shareholders of the right to vote, which shows she is unfit to serve as the company's leader, the court explained.
The court emphasized that the management dispute has highlighted problems that often occur in shareholders' meetings in Taiwan. It said the ruling serves as a warning to other companies that plan on taking controversial actions to maintain control of their boardrooms, reported ETtoday.