'Disqualified' Nominees not yet Reinstated by CPDC With Less Than 48 Hours Before AGM

TAIPEI, Taiwan, June 25, 2012 /PRNewswire/ -- Lea Lea Group has announced that with less than 48 hours before the annual general shareholders' meeting, the Chairman and Board of China Petrochemical Development Corporation (CPDC; 1314 TT) have not yet reinstated the independent director nominees that it previously disqualified. Taipei courts handed down a decision last Friday stating that CPDC should not have rejected the nominees on the grounds of 'incomplete documentation,' given that CPDC requested additional documents just hours before the filing deadline.

Two independent nominees, Daung-yen Lu and Chia-ying Ma, were put forward by a group of shareholders holding more than 30% of the shares outstanding. James Kuo, Chairman of Lea Lea Group, voiced his concerns on the situation, "Our group of shareholders is very disappointed that Chairman Shen has still not reinstated our independent director candidates despite receiving the injunction. At this late hour before the election, it may not be possible for any non-domestic investors to cast their votes for candidates that could help to balance the Board. It is regrettable for shareholders' rights that Shen's candidates have already been uncontested on electronic voting platforms".  Mr. Kuo added that based on recent conversations with Asian-based institutional investors some have been revisiting their firms' votes that may have been cast in line with ISS and Glass Lewis voting recommendations. He hopes that those global investors that might otherwise rely on recommendations from US-centric institutional shareholder service providers will instead choose to abstain on all election items given this new development – as these service providers have not had a chance to thoroughly analyze the new situation.

On the same topic, a news article published by one of Taiwan's leading financial newspapers, the Economic Daily News, (see link here) discussed the view that the Financial Supervisory Commission (FSC) seems to be taking on the issue. The article implies that local regulatory authorities may be uncomfortable about the influence that foreign institutional service providers have in local proxy contests. The article also quoted the FSC as emphasizing that global investors with ownership in Taiwan are no longer required to support management (as was the case in the past) and are free to support either side in exercising their shareholder rights.