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Article 48-2
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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.
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Article 53-22
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If a TWSE listed company conducting a demerger under Article 53-19, paragraph 1 or 2 does not carry out a capital reduction or carries out only a partial reduction, the newly formed transferee company of the demerger, when applying to the TWSE for listing, shall comply with all of the below-listed conditions:
- Incorporation period: the time of incorporation of the demerged department, as shown in the financial data of the demerged company, shall comply with Article 4, paragraph 1, subparagraph 1 of the TWSE Rules Governing Review of Securities Listings.
- Capitalization: the share capital on the pro forma financial statement for the most recent period at the time of application complies with the provisions of Article 4, paragraph 1, subparagraph 2 of the TWSE Rules Governing Review of Securities Listings.
- Profitability: complies with the provisions of Article 4, paragraph 1, subparagraph 3 of the TWSE Rules Governing Review of Securities Listings, according to the pro forma financial statement.
- Shareholding dispersion: shall comply with Article 4, paragraph 1, subparagraph 4 of the TWSE Rules Governing Review of Securities Listings.
- Article 4, paragraph 1, subparagraph 5 of the TWSE Rules Governing Review of Securities Listings are conformed to, and none of the circumstances set forth in Article 9, paragraph 1, subparagraph 1, 3, 4, 6, 8, 9, 11, or 12 of said rules exists, nor is there any of the circumstances set forth in Article 18 or 19 of the same Rules under which listing is inappropriate.
- The pro forma financial statements for the most recent fiscal year shall be audited and attested by a CPA approved by the Competent Authority to perform auditing and attestation of financial reports for public companies, and an audit report containing an unqualified opinion issued.
- Centralized custody of shares and pre-listing public sale shall be carried out pursuant to Article 10 or Article 10-1, and Article 11, of the TWSE Rules Governing Review of Securities Listings.
If more than one TWSE listed company carry out demergers and makes transfers to a single transferee on the same record date, the calculation of the incorporation period provided in subparagraph 1 of the preceding paragraph shall be based upon the TWSE listed company that transferred the business of which the operating revenue or operating income accounts for 50 percent or more of the total operating revenue or operating income of the transferee company and accounts for 10 percent or more of the overall operating revenue or discernible assets of such listed company. If more than one independently operating department was demerged, that with the longer period of incorporation may be selected as the basis for calculation.
When a demerged listed company undergoes a demerger, if the period of TWSE listing, or the combined period of TWSE listing and Taipei Exchange listing, of its securities is no less than 3 years, the transferee company of the demerger may, within 1 year of the day of completion of amendment registration of the demerger, submit an application for TWSE listing accompanied by relevant documents to the TWSE in accordance with prescribed procedures; procedures for reviewing such listing application case shall be governed by the TWSE Procedures for Review of Securities Listings.
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Article 53-23
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When a TWSE listed company conducts a demerger under Article 53-19, paragraph 1 or 2, if the transferee company of the demerger is an existing company and the operating revenue or operating income of a single TWSE listed company of which it is the transferee accounts for 50 percent or more of the total operating revenue or operating income on its pro forma financial statements, and accounts for 10 percent or more of the operating revenue or discernible assets of the demerged company, the said existing company, when applying to the TWSE for listing, shall comply with all the requirements of each paragraph of the preceding article.
The pro forma financial statements of the existing company as referred to in the preceding paragraph shall be prepared as consolidated statements with those of the single or multiple independently operating departments of the TWSE listed company of which it is the transferee.
Paragraphs 2 and 3 of the preceding article shall apply mutatis mutandis to the calculation of the incorporation period and procedures for the TWSE listing application of the transferee company of a demerger.
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