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Chapter Law Content

Title: Agricultural Finance Act CH
Category: Ministry of Agriculture(農業部)
Chapter 2 Agricultural Bank of Taiwan
Article 11
The Agricultural Bank of Taiwan is a corporation and its total capital is not lower than NT$20 billion.
Article 12
The founders of the Agricultural Bank of Taiwan are limited to the government and all levels of agriculture and fishery associations.
Agriculture and fishery associations with credit departments, with the exception of ones with negative net asset values, have the obligation to provide funds. Those agriculture and fishery associations without credit departments would provide funds voluntarily.
Article 13
When agriculture and fishery associations with credit departments act as founders for the Agricultural Bank of Taiwan, with the exception of ones with negative net values, the amount provided should not be lower than 10% of its net value in principle. Those with special difficulties should report to the central authorities for determining the amount of funds that should be provided by using the special case method.
The amount of funds provided should be calculated according to the balance sheets prepared and inspected by accountants. The central authorities would provide for the cost of inspection.
Article 14
When agriculture and fishery associations without credit departments that act as founders for the Agricultural Bank of Taiwan are provide funds voluntarily, funds should be provided in cash. In addition, the amount of funds provided cannot exceed 20% of the net value of the association.
Article 15
In the event that the Agricultural Bank of Taiwan is established by the government, the initial contribution shall be a fixed forty nine percent (49%) of the total capital. The share of contribution made by the government shall be gradually decreased, after the establishment of the Agricultural Bank of Taiwan, until it is twenty percent (20%) or lower.
Article 16
Shares of the Agricultural Bank of Taiwan owned by agriculture and fishery associations cannot be transferred unless approved by the central authorities.
Article 17
The Board of the Directors, shall elect, on a basis of number of people, the Directors in accordance with Article 198 of the Company Act, including the Independent Directors that will not be less than two (2) or one third (1/3) of the total number of Directors. The term of office of directors shall be four years and may be re-elected to a second term. However, the government or the government-appointed representatives who are elected as Directors may be permissibly re-elected.
The Independent Directors must have provable experience and abide by the limitations on share-holding and undertaking of part-time jobs. The Independent Director shall be at all times independent to the extent that it is prohibited to work or establish or have any direct or indirect interest or relation with the Agricultural Bank of Taiwan. The regulation governing the professional competency, the limits on the shares, the approval of the part-time job, the confirmation of independence, the ways of how the nomination are made and other matters shall be as prescribed by the central authorities.
Any of the following people will not be able to assume the position of an Independent Director, and the position that is assumed by such a person shall be dismissed:
1. If the person commits any actions stipulated in Article 30 of the Company Act.
2. If the position is assumed by a government, the legal person or their representatives, as stipulated by Article 27 of the Company Act.
3. The Independent Director does not meet the required qualification set forth in the regulation prescribed in the preceding paragraph.
The transfer of the shares held by the Independent Director shall not be governed by paragraph 3, Article 197, of the Company Act.
In circumstance that the Independent Director resigns from the position for any reason, and the number of the Directors is therefore less than the standard of paragraph 1 or any part of the Articles of Association, the vacant position shall be elected in the next shareholders meeting. In case that all the Independent Directors resign from the positions, the Agricultural Bank of Taiwan shall, within sixty (60) days from the date of such resignation, hold extraordinary shareholders meeting for re-election.
Article 18
For the examination of credit cases, the Agricultural Bank of Taiwan should establish a Credit Examination Committee.
For credit cases that require examination by the board of directors, resolutions should first be passed by the Credit Examination Committee and send to the board of directors for examination.
The central authorities would regulate on the range of credit cases that require examination by the board of directors mentioned in the previous paragraph.
The number of independent members in the Credit Examination Committee should not be lower than 50%. The central authorities would regulate on the qualifications and conditions for independent members for credit examination.
Directors and members in the Credit Examination Committee who are interested parties of the credit examination cases should not participate in the case examinations.
Article 19
The Board of Directors shall be called and presided by the Chairman of the Board and will perform the following obligations:
1. Elect and appoint members of the Credit Review and Evaluation Committee.
2. Appoint and dismiss the General Manager and Vice General Manager.
3. Appoint and dismiss the managers nominated by the General Manager.
4. Make the resolutions for credit cases that exceed the value reported by the Credit Department.
5. Establish principles and policies for business and various regulations.
6. Make the resolutions for the budget plans proposed by the General Manager.
7. Monitor the operation of the General Manager and the implementation of the budgets.
8. Any and all matters regulated by the Articles of the Incorporation.
Any of the following matters, with the exception of being approved by the Central Authorities, shall be submitted to the Board of Directors for its resolution, and any objection or comment raised or reserved by any Independent Director shall be recorded in the Minutes of the Board Meeting:
1. Stipulation or revision of internal control mechanisms.
2. Stipulation or revision of financial business materials, including but not limited to the disposal of assets, derivative product transactions, fund loans, endorsement and guarantees, etc.
3. Matters involving the self-interests of the Directors or Supervisors.
4. Material transactions involving assets or derivative commodities.
5. Major cash loans, endorsements or support of guarantee.
6. Collection, issuance or private placement of value securities of share rights;
7. Appointment, dismissal or rewards of a certified accountant.
8. Appointment and dismissal of finance director, account or internal auditor.
9. Any other important matter regulated by the Central Authorities.
Article 20
The number of supervisors should be set according to the articles of incorporation. Based on Article 227 of Company Act, it is allowed to use the methods of election in Article 198 to elect 50% of the supervisors. A term in the office for four years and supervisors can only be re-elected once. Other independent supervisors would be professional finance specialists recommended by the central authorities and appointed by selection at the shareholder’s meeting. The term for office would be 4 years and the supervisors can only be re-elected once. The central authorities would regulate the qualifications and conditions of independent directors.
If there are other regulations for supervisors other than this Act, their duties should be carried out independently according to the law.
Article 21
The following items should be resolved in the supervisors’ meeting. Each supervisor should recommend and select one of the independent supervisors as the head supervisor who would act as the chairperson in the supervisors’ meeting:
1. Audit business operations of agricultural finance institutions
2. Check accounts of all types and inspect balance sheets periodically
3. Prosecute any violations of this Act and articles of incorporation
4. Examine annual budgets proposed by the board of directors
5. Other regulations in the articles of incorporation
The supervisors’ meeting for making resolutions should be attended by 50% or more supervisors. Resolutions would only be effective if over 50% or more supervisors attend the meeting. The supervisors attending the meeting should vote in every resolution and cannot be waived.
Article 22
The areas of business of the Agricultural Bank of Taiwan are limited to the following:
1. Financing major agricultural infrastructures
2. Financing special agriculture cases by the government
3. Financing agriculture, forestry, fishery and livestock industries that are in-line with policies of agriculture and fishery associations.
4. All operations mentioned in all paragraphs of Article 71 in Banking Law
5. Other operations that are discussed by the central authorities and governing authorities of Banking Law as well as other operations that are approved by related governing authorities.
The Agricultural Bank of Taiwan that obtained approval from the central authorities are able to process foreign currency businesses.
Article 23
The Agricultural Bank of Taiwan should process the following for credit departments:
1. Receive -deposits
2. Provide fund accommodations
3. Guide and inspect operations and finance
4. Conduct financial evaluations and performance reviews
5. Share information
Article 24
The Agricultural Bank of Taiwan shall, after covering its losses incurred in previous years, set aside forty percent (40%) of the surplus as the legal public reserve, and if it is necessary, further set aside special reserve. The balance, if any, shall be then distributed together with the reserved surplus of the previous years as follows:
1. Dividends and bonus: eighty percent (80%).
2. Mutual-supporting fund: five percent (5%).
3. Expenses arising from assistance and promotion implemented by the Farmer’s and Fishermen’s Association at all levels: ten percent (10%) for the Farmer’s Associations and three percent (3%) for the Fishermen’s Association.
4. Reward for the employees: two percent (2%).
The mutual-supporting fund stipulated in subparagraph 2 of the preceding paragraph shall be limited to the financial support that should be delivered to the ill-managed Credit Department; and the revenue and expenditure, custody of the fund and its application rules shall be set up by the Agricultural Bank of Taiwan and approved by the Central Authorities.
In case that the legal public reserve stipulated in the first paragraph is less than the total capital amount, the surplus distributed in cash shall not exceed fifteen percent (15%) of the total capital.
Article 25
The interests and dividends of government shares regulated in the first paragraph of the previous article should be used as promotional fees for agriculture and fishery associations according to budgetary procedures.
Article 26
Articles 5 through 8-1, Article 11 to 16, Article 22, Article 25, Article 25-1, Article 26, Article 28, Article 30 to 43, Paragraph1, Paragraph 2, previous section of Paragraph 3, paragraph 4 of Article 44, Article 44-1, Article 44-2, Article 45-1, Article 45-2 and the credit card business of Article 47-1, Article 48, Article 49, Article 51, Article 55 to Article 57, Article 61-1 to 62-9, Article 63-1 to Article 69, Article 72-1, Article 72-2, and Article 74 to Article 76 of the Banking Act of Republic of China (hereafter “the Banking Act”) shall apply mutatis mutandis to the management of the Agricultural Bank of Taiwan.