1. Is there any
specific provision to regulate (re-)adjustment, (re-)valuation, or whether any
splitting of shares is allowed on shares before it’s pledged in the Company Law?
The
Company Law doesn’t specifically regulate re-adjustment, re-valuation or
splitting before a pledge, but Article 62 jo. 126 (2) subtly provide the
valuation of shares based on reasonable market price upon the objection of its
shareholder regarding any adverse corporate actions (i.e. a pledge/guaranty
burden upon 50% of company’s asset)
2.
Is there any specific
dividend payment provision in the insolvency conditions under the Company Law?
The
Company Law doesn’t regulate the dividend payment under insolvency, but remaining
asset payment after liquidation, Article 71 (3) said that dividend may only be
distributed if the Company has a positive profit balance.
3.
Is there any specific
provision in Company Law to regulate option rights / pre-emptive right / right
of first refusal on the pledgee for the then new issued shares? voting right?
The
Company Law : it’s not regulated for the
pledgee, but for the shareholder (pledgor) (Article 43 (1) & (2)), in the
other side the Company Law provides such potential regulation in limitation under
Article 43 (3) and Article 60 (4)’s
Elucidation that rights other than voting rights may be subject to an agreement
entered into by the shareholders and security holders.
In
concern to the voting right, Article 60 (4) stipulate that voting rights over
pledged shares as collateral or fiduciary guaranty shall be retained by the
shareholder.
In
capital market regulations :
rights which is enclosed to the pledged
stock including cash dividend, shares dividend, bonus of shares or other rights
in regards with the ownership of the shares/stocks, such rights are not in
unity with / not a part of the pledge of stock, (but) still stick along to the
right of the pledgor of such stocks for the duration of pledge period, unless
stipulated otherwise in the pledge instruction by account holder/pledgor/debtor
(basically in nature with the above provision).
4.
Is there any
specific provision in Company Law to regulate the reserve fund may be utilized
for “free-given” shares to third party?
The Company
Law doesn’t regulate the reserve fund for “free-given” shares.
