Chapter 3 Protection of Shareholder's Rights and Interests |
| Article 10 |
To protect its shareholders’rights and interests and to treat all shareholders fairly, a bank shall establish a corporate governance system which ensures shareholders be fully informed of, participating in and making decisions about important matters of the company. |
| Article 11 |
A bank shall convene shareholders' meetings in accordance with the Company Law and relevant laws and regulations and provide comprehensive rules for such meetings. A bank shall faithfully implement resolutions adopted by shareholders' meetings in accordance with the rules for the meetings.
Resolutions adopted by shareholders' meetings of a bank shall comply with laws, regulations and articles of incorporation. |
| Article 12 |
The board of directors of a bank shall properly arrange the proposals and agenda of shareholders' meetings. Shareholders shall be granted reasonable time to deliberate each proposal and afforded an appropriate opportunity to make statements.
For the shareholders’ meetings that are convened by the board of directors, it would be advisable for a majority of the directors to attend the meetings. |
| Article 13 |
A bank shall encourage its shareholders to actively participate in its corporate governance and hold shareholders' meetings on the premise of legal, effective and safe proceedings. A bank shall seek all ways and means, including fully exploiting technologies for information disclosure, so as to enhance the attendance rate of shareholders at the shareholders' meeting and ensure the exercise of shareholders' rights by shareholders at the shareholders' meeting in accordance with laws. |
| Article 14 |
A bank shall record the minutes of the shareholders' meeting in accordance with the Company Law and other applicable laws and regulations. With respect to unanimously adopted proposals, the meeting minutes shall state: "The resolution is unanimously adopted by all shareholders attending the shareholders' meeting after the chairman inquires all attending shareholders' opinion." As to any proposal that has received any dissent, the meeting minutes shall record the method and result of the voting. With respect to the election of directors and supervisors, the meeting minutes shall record the method of voting adopted therefore and the total number of votes for the elected directors or supervisors. The minutes of the shareholders' meeting shall be properly and perpetually kept by the company during its legal existence. It would be advisable for a bank to fully disclose such meeting minutes on its website, if any. |
| Article 15 |
The chairman of the shareholders’ meetings shall be fully familiar and comply with the rules governing the proceedings of the shareholders’ meetings established by the company.
In order to protect the interests of most shareholders, if the chairman declares the adjournment of the meeting in a manner in violation of rules governing the proceedings of the shareholders’ meetings, the attending shareholders at the shareholders’ meeting shall elect a new chairman of the shareholders’ meeting to continue the proceedings of the meeting by a resolution to be adopted by a majority of the votes represented by the shareholders attending the said meeting with the legal procedures. |
| Article 16 |
A bank shall respect the shareholders' rights to know and faithfully comply with the applicable regulations regarding the information disclosure to provide, regularly and timely, the shareholders with information relating to the financial and operational conditions and the insiders' shareholdings, and corporate government status in the bank by utilizing the Market Observatory Post System or the website established by the bank. |
| Article 17 |
The shareholders shall be entitled to profit distributions by the bank. In order to ensure the shareholders’ investment interests, the shareholders’ meeting may appoint an inspector to examine the statements and books prepared and submitted by the board of directors and the audit reports submitted by the supervisors, and may decide, by resolution, profit distributions and deficit off-setting plans. The board of directors, supervisors, and managers of a bank shall fully cooperate in the examination conducted by the inspectors without any obstruction, rejection or circumvention. |
| Article 18 |
In entering into material financial and business transactions outside the business scope, such as acquisition or disposal of assets, a bank shall establish the operating procedures in relation to these material financial and business transactions in accordance with the applicable laws and/or regulations and have the same report to and approved by the shareholders’ meeting so as to protect the interests of the shareholders. |
| Article 19 |
In order to protect the interests of the shareholders, it would be advisable for a bank to handle shareholders' proposals, inquiries and disputes properly.
A bank shall properly deal with matters arising from any action instituted by shareholders pursuant to the applicable laws claiming damage to such shareholders' interests caused by the resolution adopted in its shareholders' meetings or the board of directors meetings in violation of the applicable laws, regulations or its articles of incorporation, or claiming a breach by its directors, supervisors or managers of applicable laws, regulations or the company's articles of incorporation in performing their duties. |
| Article 20 |
A corporate shareholder having controlling power over a bank shall comply with the following provisions:
1. It shall bear a duty of good faith to other shareholders and shall not directly or indirectly cause the company to be engaged in transactions at other than arm's length or involved in a management conduct for illegal profit.
2. It shall define relevant rules of duties and voting policies for their representatives to abide by. When participating in shareholders meetings, the representative shall exercise his/her voting rights in good faith and for the best interest of all shareholders, and exercise the fiduciary duty and duty of care of a director or supervisor.
3. It shall comply with relevant laws, regulations, and the articles of incorporation in nominating directors or supervisors and shall not act beyond the authority granted by the shareholders meeting or board meeting.
4. It shall not improperly intervene in bank policymaking or obstruct bank management activities.
5. It shall not restrict or impede the business of the bank by methods of unfair competition. |
| Article 21 |
A bank shall clearly identify the allocation of its management authorities and responsibilities over personnel, assets and financial matters of its affiliated enterprises, and shall conduct risk evaluation and establish appropriate firewalls. |
| Article 22 |
In order to prevent a bank's interested party from exploiting their duties to engage in improper extension of credit, and thereby damage the rights and interests of the shareholders and depositors and affect the bank's sound operations, the bank shall restrict the extension of credit on the major shareholders, invested enterprises, responsible persons and staff of the bank, or persons having interested relationships with the bank's responsible persons or credit-granting staff. The bank shall comply with the Banking Act and relevant regulations prescribed by the competent authority about the limitation of the extension of credit to interested parties. |
| Article 23 |
In order to prevent the illicit tunneling of profits and consequent harm to the rights and interests of the bank or shareholders, when engaging in real estate transactions with major shareholders, invested enterprises, responsible persons and staff of the bank, or persons having interested relationships with the bank’s responsible persons shall be based on the principles of fairness, justice and impartiality, and shall uphold normal business conventions, and act in accordance with the Banking Act and relevant regulations prescribed by the competent authority. |
| Article 24 |
Unless otherwise provided by the laws and regulations, a manager of a bank may not serve as a manager of its affiliated enterprises.
A director, who engages in any transaction for himself or on behalf of another person that is within the scope of the bank's business, shall disclose to the shareholders' meeting the material terms of such transaction and obtain its consent. |
| Article 25 |
A bank shall establish a sound management system for finance, operations and accounting in accordance with applicable laws and regulations.
A bank may establish a large exposures management system when warranted by their business situation. |
| Article 26 |
Where a bank and its affiliated enterprises enter into inter-company business transactions, a written agreement governing the relevant financial and business operations between each other shall be made in accordance with the principle of fair dealing and reasonableness. Both parties shall definitively stipulate the terms and conditions of the price and payment terms mechanism, and desist from any transactions that are other than at arm's length. |
| Article 27 |
A bank shall ensure the command at any time of information on the identity of major shareholders and disclose periodically important information about its major shareholders relating to the pledge, increase or decrease of share ownership, or other matters that may possibly trigger a change in the ownership of their shares.
"Major shareholder" in the preceding paragraph means a shareholder who owns 5 percent or more of the equity shares of the bank or whose equity shareholding ratio is among the top 10 shareholders, provided however that the bank may set a lower shareholding ratio threshold according to the shareholding ratio that could actually control the company. |