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Article NO. Content

Title:

Directions for Public Companies Conducting Private Placements of Securities  CH

Amended Date: 2014.12.30 
6     Information disclosure:
  1. TWSE listed, GTSM listed, and emerging stock companies shall input information on the private placement of securities into the MOPS in accordance with the rules of the TWSE and the GTSM:
    1. Within 2 days starting from the date of the resolution of the board of directors meeting:
      1. the matters required to be specified in the shareholders' meeting notice as provided in Article 43-6, paragraph 6, of the Act
      2. If the price per share of privately placed common shares is lower than 80 percent of the reference price, or the issuance price of preferred shares, convertible corporate bonds, preferred shares with warrants, corporate bonds with warrants, or employee stock warrants is lower than 80 percent of the theoretical price, also disclose the independent expert's opinion on the basis and reasonableness of the private placement pricing.
      3. If the placee makes any non-cash capital contribution, also disclose the independent expert's opinions on the reasonableness of the amount offset by the non-cash capital contribution.
      4. If the placees are insiders or related parties of the company, also disclose the list of placees, method and objectives of selecting the placees, and the relationship between the placees and the company. If any placee is a juristic person, the name of the juristic person and the name and the percentage of shareholdings shall be given of every shareholder of the juristic person whose equity interest ranks among the top 10, and also of the relationship to the company of every shareholder of the juristic person whose equity interest ranks among the top 10.
      5. If any placee is a strategic investor, also disclose the method and objectives of selecting the placee, the necessity of that selection, and the anticipated benefits.
      6. If an independent director expresses an objection or reservation, also disclose that independent director's opinion.
      7. If there is a significant change in managerial control within the 1 year period immediately preceding the day on which the board of directors resolves on the private placement, or there will be a significant change in managerial control after the introduction of a strategic investor through private placement, also disclose the assessment opinion issued by the securities underwriter on the necessity and reasonableness for conducting the private placement.
    2. Within 2 days starting from the actual date of determination of the private placement price:
      1. the monetary amount of the private placement, the use of the funds raised in the private placement, the schedule for use of the funds and anticipated benefits, the ratio of the current private placement amount and the anticipated cumulative amount of all private placements to the total paid-in capital, the method for selecting the placees, the basis for setting of the private placement price resolved by the shareholders' meeting, the private placement reference price and the actual private placement price, conversion price, or subscription price.
      2. For exchangeable corporate bonds, if the exchange price is lower than 80 percent of the reference price for the common shares of the exchangeable underlying stock, also request an expert to provide an opinion on the basis and reasonableness of the pricing, and disclose on the MOPS the reasonableness of the difference and the expert opinion.
      3. If, as it turns out, the actual price per share of privately placed common shares or preferred shares, or the conversion price of convertible corporate bonds, or the subscription price of preferred shares with warrants, corporate bonds with warrants, or employee stock warrants is lower than the par value of the shares, disclose the cause, reasonableness, method of price setting, and any effect on the shareholders' equity (such as an increase in accumulated loss, or the possibility of future capital reduction as a result of an increase in accumulated loss).
    3. Within 10 days from the end of each quarter: the status of use of the funds raised by the private placement of securities; from the time the price of the shares or subscription has been paid up in full until the fund utilization plan has been completely carried out, a quarterly statement shall be published detailing the status of utilization of the funds raised in the private placement.
  2. Within 15 days starting from the time the price of the shares or subscription has been paid up in full, the public company shall input into the MOPS the information on the private placement of securities as required under Article 43-6, paragraph 5 of the Act (see Attachment):
    1. The type of securities privately placed, the date of the shareholders' meeting resolution, the monetary amount of the private placement, the unit price of the private placement, the basis on which the price was set, the total number of shares placed in the current private placement, the date the price of the shares or subscription has been paid up in full, the delivery date, the expiration date, the reason for conducting the private placement, the targets of the private placement, proportional shareholdings of the placees, relationship between the placees and the company, estimated number of director or supervisor seats to be obtained by the placees. For any placee that is a juristic person, the name of the juristic-person shareholder shall be given, together with the name and shareholding of every shareholder of the juristic person whose equity interest ranks among the top 10, and also the relationship to the company of every shareholder of the juristic person whose equity interest ranks among the top 10.
    2. In a case of private placement of employee stock warrants, also simultaneously disclose: the subscription volume of each individual subscription rights holder, the volume that may be subscribed to by each individual subscription rights holder per accounting year, the method for performance, and the duration of the rights.
    3. In a case of private placement of overseas securities, also simultaneously disclose: the type of securities, denominated currency of the issue, and place of listing.
  3. The public company shall disclose the relevant matters regarding the conducting of the private placement in accordance with the Regulations Governing Information to be Published in Public Offering and Issuance Prospectuses.