Enforcement
Fine Imposition on the Principal of Chung Fu Tex-International Corporation
2021-05-06
I. Date of punishment: May 6, 2021
II. Object of punishment: XX Huang, principal of Chung Fu Tex-International Corporation.
III. Legal basis for the punishment: Subparagraph 8, paragraph 3, Article 26 and Article 36-1 of the Securities and Exchange Act, subparagraph 1, paragraph 1, Article 31 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies, and paragraph 1, Article 16 and subparagraph 7, paragraph 1, Article 17 of the Regulations Governing Procedure for Board of Directors Meetings of Public Companies.
IV. Facts of law violation:
(I) On December 11, 2020, Chung Fu Tex-International Corporation (Chung Fu Corporation) decided to sell the equity of Fu Hsing Investment Corporation (hereinafter referred to as Fu Hsing Investment) to LM Marketing Co., Ltd. (LM Marketing) by resolution of the board meeting. The transaction amount reached more than 10% of the total assets of Chung Fu Corporation as in its financial report in the third quarter of 2020, but the company failed to make a public announcement within two days from the date of the occurrence of the fact. This is verified to have violated the provisions of Article 36-1 of the Securities and Exchange Act, and the provisions of subparagraph 1, paragraph 1, Article 31 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies.
(II) On December 11, 2020, Chung Fu Corporation decided to sell the equity of Fu Hsing Investment to Chung Fu Integrated Marketing by resolution of the board meeting. It is verified that among the three seats of corporate directors attending the meeting on that date, the three corporate representatives of Chung Fu Integrated Marketing (XX Huang, XX Hu and XX Jin) and the independent director XX Hu, who is concurrently the corporate director representative of Fu Hsing Investment appointed by Chung Fu Corporation, have personal interests involved in the issue; however, according to the minutes of the board meeting, there was no explanation of the important contents of the interests involved during the meeting, and there was no interest avoidance by the corporate representatives of Chung Fu Integrated Marketing among the three corporate directors. In addition, Chung Fu Corporation did not record in detail the names of the directors with personal interests involved, the important contents of the interests involved, the reasons for avoidance or non-avoidance of the resolution process, and the status of avoidance in the minutes of the board meeting. This is verified to have violated the provisions of subparagraph 8, paragraph 3, Article 26 of the Securities and Exchange Act, and the provisions of paragraph 1, Article 16 and subparagraph 7, paragraph 1, Article 17 of the Regulations Governing Procedure for Board of Directors Meetings of Public Companies.
V. Punishment: A fine of NT$480,000 is imposed on the principal of Chung Fu Tex-International Corporation for the acts above in accordance with subparagraphs 9 and 11, paragraph 1, Article 178 and paragraph 1, Article 179 of the Securities and Exchange Act.
Contact unit: Section Chief Tsai, Corporate Finance Division, Securities and Futures Bureau
Tel: 02-2774-7126
For any questions, please write to: FSCMAIL
II. Object of punishment: XX Huang, principal of Chung Fu Tex-International Corporation.
III. Legal basis for the punishment: Subparagraph 8, paragraph 3, Article 26 and Article 36-1 of the Securities and Exchange Act, subparagraph 1, paragraph 1, Article 31 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies, and paragraph 1, Article 16 and subparagraph 7, paragraph 1, Article 17 of the Regulations Governing Procedure for Board of Directors Meetings of Public Companies.
IV. Facts of law violation:
(I) On December 11, 2020, Chung Fu Tex-International Corporation (Chung Fu Corporation) decided to sell the equity of Fu Hsing Investment Corporation (hereinafter referred to as Fu Hsing Investment) to LM Marketing Co., Ltd. (LM Marketing) by resolution of the board meeting. The transaction amount reached more than 10% of the total assets of Chung Fu Corporation as in its financial report in the third quarter of 2020, but the company failed to make a public announcement within two days from the date of the occurrence of the fact. This is verified to have violated the provisions of Article 36-1 of the Securities and Exchange Act, and the provisions of subparagraph 1, paragraph 1, Article 31 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies.
(II) On December 11, 2020, Chung Fu Corporation decided to sell the equity of Fu Hsing Investment to Chung Fu Integrated Marketing by resolution of the board meeting. It is verified that among the three seats of corporate directors attending the meeting on that date, the three corporate representatives of Chung Fu Integrated Marketing (XX Huang, XX Hu and XX Jin) and the independent director XX Hu, who is concurrently the corporate director representative of Fu Hsing Investment appointed by Chung Fu Corporation, have personal interests involved in the issue; however, according to the minutes of the board meeting, there was no explanation of the important contents of the interests involved during the meeting, and there was no interest avoidance by the corporate representatives of Chung Fu Integrated Marketing among the three corporate directors. In addition, Chung Fu Corporation did not record in detail the names of the directors with personal interests involved, the important contents of the interests involved, the reasons for avoidance or non-avoidance of the resolution process, and the status of avoidance in the minutes of the board meeting. This is verified to have violated the provisions of subparagraph 8, paragraph 3, Article 26 of the Securities and Exchange Act, and the provisions of paragraph 1, Article 16 and subparagraph 7, paragraph 1, Article 17 of the Regulations Governing Procedure for Board of Directors Meetings of Public Companies.
V. Punishment: A fine of NT$480,000 is imposed on the principal of Chung Fu Tex-International Corporation for the acts above in accordance with subparagraphs 9 and 11, paragraph 1, Article 178 and paragraph 1, Article 179 of the Securities and Exchange Act.
Contact unit: Section Chief Tsai, Corporate Finance Division, Securities and Futures Bureau
Tel: 02-2774-7126
For any questions, please write to: FSCMAIL
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- Update： 2021-07-13
