New regulations governing enterprises' stock cross holding is set to take effect by this year's end- a subsidiary holding over 5 percent of its parent company's shares must make public the information periodically and will be under TSEC's management as exceptional subject

Source: Economic Daily News 11/13/99

Translated by Anita Huang

 

　Taiwan Stock Exchange Corporation (TSEC) decided that a subsidiary which holds its parent company's shares exceeding a fixed percentage should publicize the information periodically and be under the management of the TSEC.  Such new regulation is expected to take effect by the end of this year.

 

　Once a listed company is regarded as exceptional subject under management, the TSEC will conduct a substantial investigation on this company with a view to finding whether this company's financial or business state is normal.  Such examination is much severer than regular examination.

 

　The TSEC's move aims to prevent listed companies from utilizing affiliated enterprises to manipulate companies' stocks and avoid financial turmoil and other adverse effect resulted from stock manipulation.

 

　A subsidiary which holds its parent company's stock or holds another company's stock reaching a certain ratio should unveil the detailed information as there exists the so-called "joint venture" among the listed companies currently.  Therefore, by means of disclosing information periodically it can prevent stock manipulation between the subsidiary and the parent company or among companies.