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The TCC delivers its Judgment 112-Hsien-Pan-5 (2023)


    TAIPEI, May 4, 2023. The Taiwan Constitutional Court (TCC) has delivered its Judgment of the "Case on the Blankettgesetz (Blank Form Statute) in the Securities and Exchange Act" on April 28, 2023. 


Principal Facts, Issues, and Procedure of the Case

    In 2005, the petitioners of this case, I-Chun NAN and Hsiang-Ming CHEN, employees of the China Development Financial Holding Corporation (CDFH), were authorized by the CDFH to acquire stocks of the Global Securities Finance Corp. (GSF) as an attempt to advance its merger with Taiwan International Securities Co., Ltd.(TISC). Although the petitioners had purchased 42.93 percent of the GSF-issued shares, they agreed on a phased delivery of stocks, with each delivery consisting of no more than 20 percent of the GSF-issued shares and more than 50 days apart, under the belief that by this way they would not need to go through a tender offer. The petitioners were charged and later sentenced to imprisonment (commutable to a fine) by the Taiwan High Court on the grounds of violation of mandatory tender offer rules stipulated by the Securities and Exchange Act (SEA) and the Regulations Governing Public Tender Offers for Securities of Public Companies (hereinafter "Tender Offers Regulations"). The Taiwan High Court held that under literal and teleological interpretations of the provisions, the petitioners’ conduct still constituted an evasion of regulations on tender offers. 

    After exhausting all ordinary remedies, the petitioners lodged a petition arguing that (1) Article 43-1, Paragraphs 3 and 4, Article 175, Paragraph 1 of the SEA contradict the principle of nullum crimen, nulla poena sine lege certa (principle of legal certainty in criminal law); and (2) Article 11, Paragraph 1 of the Tender Offers Regulations contradicts the doctrine of specific authorization. 

    The oral argument of this case was on February 7, 2023, with relevant documents made public on the TCC website per the requirements of the Constitutional Court Procedure Act (CCPA). Judgment 112-Hsien-Pan-5 was delivered at 3 p.m. on April 28, 2023, with all Justices present except Justice Jui-Ming HUANG, who recused himself from this case. Justice Jiun-Yi LIN wrote this Judgment. Justice Horng-Shya HUANG filed a concurring opinion. Justice Tzung-Jen TSAI (joined by Justice Chong-Wen CHANG) filed an opinion dissenting in part. Justice Ming-Cheng TSAI filed a dissenting opinion. Justice Jui-Ming HUANG recused himself from the conduct of the proceedings.


Decision of the Court

    The TCC upheld the constitutionality of the disputed provisions, ruling that the disputed provisions have constituted no violation of the principle of nullum crimen, nulla poena sine lege certa (principle of legal certainty in criminal law) and no violation of the doctrine of specific authorization. The TCC noted that block traders are the primary subject to the disputed regulations and are more knowledgeable about tender offer regulations. The TCC ruled that under literal and teleological interpretation of Article 43-1, Paragraph 3 of the SEA, it is foreseeable for the block traders that the text "intends to acquire within 50 days" in Article 11 of the Tender Offers Regulations should interpret as regulating the "prior agreement on acquisition" rather than the actual acquisition of the share’s property right within 50 days, as the agreement is what impacts the stock market. The TCC also ruled that viewing pertaining SEA articles comprehensively, Article 43-1, Paragraph 4 of the SEA has provided certain and specific authorization for the competent authority to stipulate the constitutive elements of tender offer evasion in Article 11, Paragraph 1 of the Tender Offers Regulations.



  1. Full texts of the Judgment and Opinions are available on the TCC website at https://cons.judicial.gov.tw/docdata.aspx?fid=38&id=344513  (Traditional Chinese). An English summary of this Judgment will be available later on the TCC English website.
  2. The TCC's Case News is prepared by the Department of Clerks for the Constitutional Court (Judicial Yuan) for information only and does not bind the Court. 
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