Article 125, Paragraph 3 of the Banking Law penalizes the de facto legal representative of a juristic person who has engaged in the actual act and is not limited to the legal representative or managerial officers indicated in the company registration data (Taiwan)

Elva Chuang

The Supreme Court rendered the 107-Tai-Shang-3554 Decision of April 11, 2019 (hereinafter, the “Decision”).  According to the facts underlying this Decision, the Appellant (or the Defendant) was the chairman and de facto legal representative of the company that allegedly had violated the Banking Law.  The Appellant was obviously aware that a non-banking institution shall not operate the business of accepting deposits and shall not agree to or pay bonuses, interest, dividends or other remunerations which are obviously very incomparable to the principals in order to accept payments or absorb funds from the multitude or a non-specific multitude of people in the name of accepting funds or allowing them to become shareholders or for other reasons.  However, the Appellant dictated the planning of the Arrangements for the Joint Purchase of Emerging Stocks and solicited investment from non-specific individuals beginning with June 2014 out of a joint criminal intent to operate the banking business together with the other Defendants by announcing to the public that the Appellant guaranteed that bonuses, interest and compensation obviously incomparable to the principals would be received in a fixed period.

According to this Decision, Article 125, Paragraph 3 of the Banking Law specifically provides that if a juristic person violates the requirement under Article 29, Paragraph 1 of the Banking Law.  The penalty to the person responsible for the act of the juristic person means that the legal representatives of the juristic person who engage in the actual act shall be penalized.  The “actual act” refers to any act of actual participation in the decisions and business execution relating to the absorption of funds, while the “legal representatives of a juristic person” means the corporate legal representative and the de facto corporate manager within the scope of their responsible duties under Article 8, Paragraphs 1 and 2 of the Company Law and shall not be limited to the legal representative or managerial officers recorded in the company registration data.