If a listed company is reducing the percentage of its direct or indirect shareholding in (or contribution to) its key subsidiary by 10 percent or more, on an accumulative basis, in three years or has lost its control over the subsidiary, it shall appoint an independent expert to issue an opinion on the fairness of the price in the various reductions and the impact on the shareholders' equity of the listed company.
The listed company shall submit the written opinion in the preceding paragraph, how percentage of shareholding in (or contribution to) the key subsidiary will be reduced, the parties to whom equities (or contributions) are to be assigned or the specified persons being contacted, and whether continued listing of shares of the listed company on the TWSE will be affected to its audit committee for review and then submit the results of the review to its board of directors for discussion. Where the company has not established an audit committee, the approval of two-thirds of all members of the board of directors shall be required.
The three years as referred to in the first paragraph shall be the three-year period prior to the day of occurrence of the relevant event. Those changes occurring during this period that have been dealt with in accordance with this Article, however, shall be excluded.
For purpose of the preceding paragraph, the day of occurrence of the relevant event shall mean the agreement date, contract signing date, payment date, closing date of consigned trading, transfer of title date, date of resolution of a board of directors or a committee established by the BOD, or any other day when the counterparty to a transaction or the trading value can be confirmed, whichever is earlier. In case of an investment requiring the approval by the competent authorities, however, the day shall be one of the above dates or the date when the approval by the competent authorities is received, whichever is earlier.
A listed domestic company that is an investment holding company or financial holding company and is a subsidiary that has met the standards under Article 7, paragraph 3 of the TWSE Procedures for Verification and Disclosure of Material Information of Companies with Listed Securities will be deemed a key subsidiary for purposes of this Article.
In the event of a listed company's violation of this Article, the TWSE may notify it for improvement, change how its securities are trading, or suspend trading of its securities depending on degree of severity.