RELAXATION OF RULES ON ISSUE PRICE DISCOUNT FOR COMMON SHARES TO BE ISSUED THROUGH RIGHTS ISSUE OR FOR SPONSORING GDSs ISSUANCE

03/01/2009

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To assist domestic listed companies (on Taiwan Stock Exchange or GreTai Securities Market) to raise capital to weather the economic downturn, the Financial Supervisory Commission (FSC) in February 2009, approved the proposal of the Chinese Taiwan Securities Association to relax rules on the issue price discount for common shares to be issued by domestic companies through rights issue (where the preemptive rights of all shareholders are waived) or for sponsoring global depositary shares (GDSs) issuance.  Accordingly, for applications submitted to the FSC on or before 30 June 2009, the new shares may be offered at up to 20% discount to the benchmark price; originally the maximum discount allowed is 10%.

       

Given the relaxed rule, the FSC adopted the following measures to protect the rights and interests of shareholders:

       

	Ÿ	For new shares to be issued at a discount larger than the current statutory 10% maximum discount to the benchmark price, approval through resolution of the shareholders meeting or the board meeting of the issuer should be obtained; the reason, rationality, legality and impact on shareholders' rights and interests should be specified; and underwriters should be engaged to assess feasibility of full subscription.
	Ÿ	The issuer should announce relevant information that existing shareholders may participate in subscription through book building, and post related information on the Market Observation Post System website, so as to safeguard existing shareholders' rights and interests.
	Ÿ	The issuer and underwriters should not involve in any act for the interests of specific persons or to adversely impact on shareholders' rights and interests.