Newsletter
PREVIOUS BOARD REINSTATED IF COURT ANNULS THE BOARD ELECTION
The Company Act provides that if the procedure by which a shareholders' meeting is convened, or the means by which a resolution is adopted at a shareholders' meeting, violates law or the com-pany's articles of incorporation, shareholders may, within 30 days after the date of a resolution passed by such a meeting, petition the court to annul the resolution.
In an interpretation dated 27 October 2005, the Ministry of Economic Affairs (MOEA) stated that if a resolution of a shareholders' meeting is annulled by a court judgment and the judgment becomes final, the resolution will become null and void with retroactive effect from the time of the resolution, and the situation prior to the resolution will be reinstated. Thus if the resolu-tion was for the election of directors and super-visors, the directors and supervisors in office prior to the resolution should be reinstated in office. If by that time the terms of office of the previous directors and supervisors have expired, they may continue to carry out their duties until new directors and supervisors are elected and take office. But the MOEA has the power to set a deadline for the company to hold new elections, and if there is no new election by the deadline, the incumbent directors and supervisors will be automatically removed from office on that date.