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question and answer
:: Question :: I am a member of the Supervisory Commission (the Commission) of a public company which is unlisted and termed from 2007 to 2010. Until now, my term is still valid. In 2009, I was [not] invited to attend any meeting of the company’s Commission. Recently, I also did not attend the Commission’s meeting to produce the Commission’s Report for submission to the General Shareholder’s Meeting (the Meeting) year 2010 on April 9. I was informed that this Commission’s Report was built by the Commissions’ Director (the another member of the Commission also did not attend). I would like to ask you whether the operation of the Commission like that is legal or not? Is the Report mentioned above legal? What should I do to comply with the rights, duties and obligations of a Commission’s member?
Answer:
Article 123 of the Enterprise Law stipulates the rights and obligations of the Commission, accordingly the Commission acts as a “body” and does not base on the status of each member. Moreover, paragraph 2 Article 121 of the Enterprise Law stipulates: “The Company’s Charter shall stipulate the rights and obligations of the Commission’s Director.” Hence, in order to identify: (i) the operation of the Commission and (ii) the validity of the annually Commission’s Report which is submitted only by the Commission’s Director to the Meeting in 2010 as mentioned above, you need to further check with the provisions of the Company’s Charter. If according to the Company’s Charter the Commission’s Director can adopt the report by himself, the operation and report of the Commission shall comply with that regulation. In case, the Company’s Charter does not have that regulation, the annually report of the Commission shall be adopted by the whole Commission. In that case, the report which is made and submitted only by the Commission’s Director to the Meeting is not appropriate with the laws and therefore no valid.
According to paragraph 1 Article 123 of the Enterprise Law, the Commission shall have the responsibility with the Meeting while conducting its assigned duties. As a result, when discovering the report reflecting incorrect information, you have to inform the Meeting about that event.
One of the duties and rights of the Commission stipulated specifically at Article 123 of the Enterprise Law is to examine and submit financial reports, annually business reports of the company and the management evaluation report of the Board of Management (“Reports”) to the Meeting at its annual convention. During this period, if you are a member of the Commission and you do not receive the Reports mentioned above, you have the right to request the supply of that Reports so that you can conduct your regulatory duty of examining Reports of the Commission.
orther:
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