Taishan Company was fined a sky-high liquidated damages of 3 million yuan by the stock exchange in 2023 for repeatedly violating regulations on publishing serious news. Taishan later filed a civil lawsuit for damages against then chairman Zhan Jingchao, seeking compensation for losses of 3 million yuan. In the first instance, the Taipei District Court found that Zhan did have reasons to blame, and the company was found to have serious violations by the stock exchange, and ordered Zhan to pay compensation of NT$3 million. In the second instance, the High Court rejected Zhan Jingchao's appeal and upheld the original verdict. Zhan's appeal was rejected by the Supreme Court, and Zhan definitely lost the case.
Taishan Company claimed that during his tenure as chairman, Zhan Jingchao deliberately committed a series of illegal acts in order to retaliate against the back-end management team. Including Taishan's application to the Intellectual Property and Commercial Court for temporary status sanctions on April 21, 2023, prohibiting shareholders from convening the second extraordinary shareholders' meeting in 2023, but Zhan and his management team did not enter the public information observatory's important information screen as late as May 4.
In addition, Taishan held a press conference on May 6, 2023 to explain the equity investment case of Jiekou Financial Technology Co., Ltd. Zhan Jingchao was supposed to enter important information on May 5, but he did not enter it until May 8.
On May 8, 2023, when Taishan issued a relevant announcement and obtained serious news about the internal control project review report of the non-certified accountant, Zhan Jingchao and his management team did not disclose it in detail in order to cover up their own shortcomings. The stock exchange ordered Taishan to make corrections, but Zhan Jingchao did not do so until the stock exchange ordered him to pay liquidated damages.
The major announcement of the ex-officio dismissal of independent director Chen Minxun on May 9, 2023 was inconsistent with the letter from the competent authority. The stock exchange sent a letter notifying him of corrections, but Zhan Jingchao did not process it. Taishan Company claimed that Zhan Nan still delayed the input despite repeated reminders. He was a repeat offender and the violation was serious. He should be liable for damages and should pay the stock exchange a liquidated damages of 3 million yuan.
Zhan Jingchao argued that according to Taishan Company’s internal major information handling procedures on November 10, 2022, the final decision maker on whether to release major information in Taishan was the general manager, and the then general manager was Cai Zhengda. Therefore, the final approval of major news releases during that period should be made by Cai Zhengda. In addition, three sets of passwords were required to be entered in the process of releasing the re-information, but he did not know any of them, so there was no possibility of hindering the release of the re-information.
The first instance of the Taipei District Court and the second instance of the High Court both found that when the illegal incident in this case occurred at Taishan Company, Zhan Jingchao was the legal agent and failed to fulfill the duty of care of a good manager, resulting in a series of illegal and serious announcements of Taishan Company. Therefore, Taishan Company should compensate Taishan Company 3 million yuan. Zhan Jingchao appealed to the third instance. The Supreme Court believed that the original judgment was not erroneous, dismissed the appeal, and the whole case was confirmed.
