CORPORATE SHAREHOLDERS MAY NOT ATTEND SHARE-HOLDERS' MEETINGS BEFORE REGISTERING SHARE TRANS-FER

07/01/2006

---

In an interpretation dated 1 March 2006, the Ministry of Economic Affairs confirmed that, upon transfer of share ownership, until such time as the transfer is recorded in the company's shareholders roster, the new owner of the shares cannot assert the transfer against the company. Accordingly, a corporate shareholder that has not been recorded in the shareholders roster before the commencement of the non-book-entry period for a shareholders' meeting cannot have its rep-resentative elected as a director or supervisor.

But if a corporate shareholder attends a share-holders' meeting before completing share trans-fer, does its appearance affect the validity of resolutions passed at the meeting? In the above interpretation, citing a 2000 judgment of the Supreme Court, the MOEA stated that if, after deducting the votes of non-shareholders, the number of valid votes cast in favor of a motion is sufficient for the resolution to pass, the resolu-tion is valid and the resolution cannot be re-voked.