Flaws Found in TSMC-ASMI Merger
January 31, 2000 (TAIPEI) -- Already courting controversy for accepting a much lower stock swap ratio than in the merger between Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) and Asian Semiconductor Manufacturing Corp., Acer Semiconductor Manufacturing Inc. (ASMI) has run into trouble again, as the Securities & Futures Commission (SFC) questioned the appropriateness of its marriage with TSMC.
SFC Chairman Lin Chung-yung pointed out that he does not recall that any meeting of the company's directors of the board was held before the TSMC-ASMI merger was announced. If the consent of board members was not obtained before the announcement, the regulations require the merger to be voided, said Lin.
Responding to the question of the SFC, TSMC said ASMI has already held an ad hoc board meeting on Jan. 18 to approve a change in stock swap rate of the TSMC-ASMI merger. ASMI will hold a shareholders' meeting on March 1 to approve the plan.
TSMC officers also explained that since the TSMC-ASMI merger was the first among local listed companies, the procedures may not have been followed entirely to the letter. However, ASMI immediately held an ad hoc board meeting to approve the matter one week after the merger announcement. Now, since TSMC has decided to change the stock swap ratio, and will again obtain the approval of board members and shareholders, the legitimacy of the merger will not be affected.
TSMC said since there is no law to prohibit companies from changing stock swap ratios in merger deals, the company has decided to change the swap ratio with ASMI after making a more detailed study of the figures.
(Commercial Times, Taiwan)
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