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In the business world, the battle for corporate control often becomes a fierce struggle, not only impacting the future of the companies but also deeply affecting market and investor confidence. In Taiwan, the fight for control particularly takes place within family businesses. Furthermore, this battle for control can also involve participants beyond the management level, which is the market parties. The market and company parties hold different managerial philosophies, engaging in intense competition for the decision-making power of the company. In this article, we will delve into two recent captivating cases of corporate control disputes, explaining their struggle for control and exploring the catalysts behind these battles!
A business ownership dispute refers to a disagreement among shareholders or other stakeholders in a company regarding ownership or control rights. The dispute may arise due to various factors such as unclear equity distribution, poor corporate governance, or differences in decision-making.
Now, most shares of companies are no longer held by individuals or families but rather shared among multiple external shareholders. It is important to note that the shares owned by shareholders represent ownership of the company, not actual control. The actual operational control lies with the board of directors. The separation of ownership and management aims to establish a balance of power and responsibilities between internal and external stakeholders.
When shareholders perceive poor board performance or want to acquire operational control of the company, disputes over management rights may arise. Such disputes are no longer confined to internal family struggles but rather power games initiated by the “company party” and the “market party.”
In the context of ownership disputes, the term “company party” refers to individuals within the company who hold positions and own shares of the company. For example, if senior executives also hold shares of the company, they can be classified as part of the company party. On the other hand, the “market party” refers to individuals who hold shares of the company but are not internal members of the company. For instance, if we purchase shares of a company without participating in its business operations, we can be categorized as part of the market party.
According to the TESG Event Radar, there have been two ownership disputes this year, involving the companies TaiShan (1218.TW) and Shin Kong Financial Holding (2888.TW). Furthermore, we have compiled data from the TESG Event Radar to provide an overview of the background and details of these two ownership disputes.
