Powerchip Innovation Investment Holding said on Nov. 2 that it had filed a complaint with the Taipei District Prosecutors Office, accusing the organizers of a coordinated share-selling campaign of trying to assemble minority shareholders’ stakes so an unidentified buyer could acquire a 20% holding at NT$50 per share, with the total deal value exceeding NT$13.6 billion, without filing a required tender offer.
The company also asked the competent authorities to investigate whether the funding involved may be tied to money laundering or offshore capital.
Complaint targets campaign organizers and unidentified buyer
According to an Economic Daily News report, Powerchip’s legal staff and retained lawyers went to the Taipei District Prosecutors Office before 11 a.m. on Nov. 2 to file the complaint. The targets were the shareholder who initiated the coordinated share-selling effort and the buyer said to be operating behind the scenes without a disclosed identity.
Powerchip also urged shareholders not to trust related claims and said they should avoid actions that could lead to losses.
Company says LINE groups and Google Forms were used to gather shares
Powerchip said the organizers used LINE communities and Google Forms to solicit shareholders. It said pre-stamped share purchase agreements were sent out, encouraging small shareholders to pool their holdings so that the total number of shares would reach what was described as the standard for corporate control, after which a 「capable buyer」 would purchase the shares at NT$50 each.
Under the plan described by the company, the buyer would seek to obtain a 20% stake within 50 days for more than NT$13.6 billion. The report noted that a 20% holding could carry greater influence in shareholder voting and board elections, though it would not automatically give direct control of the company.
Lawyers say no tender offer filing was made
Powerchip’s retained lawyers said that a large-scale purchase of shares from an unspecified broad group of shareholders should be reported to regulators and publicly announced as a tender offer, with a tender offer prospectus disclosing the purchase price, quantity, and source of funds.
They said the organizers instead used conditional share purchase agreements and planned to settle the shares in a batch, in an attempt to obtain more than 20% of the company. The lawyers said that could violate Article 43-1, Paragraph 3 of Taiwan’s Securities and Exchange Act and Article 11, Paragraph 1 of the Regulations Governing Public Tender Offers for Securities of Public Companies.
Board and supervisor election set for Nov. 25
After Powerchip Group founder Huang Chong-ren died on July 31, the company scheduled an extraordinary shareholders meeting for Nov. 25 to elect seven directors and three supervisors. Both the current board and the shareholders behind the coordinated share-selling campaign have already nominated candidates.
Powerchip has also launched a NT$1 billion treasury stock buyback plan and repurchased shares at NT$42 on Oct. 27 and Oct. 28. While the outside buyer’s indicated price of NT$50 is higher, the proposed acquisition remains only a plan at this stage.
