Taishin FHC Corporate Social Responsibility Report 2019

131 Stakeholder Engagement Below is the detailed info from our site, you can click on: 2014 ： Taishin filed a civil lawsuit and provisional injunction against the Ministry of Finance and filed a complaint to the Control Yuan. 2015 ： In its investigation report, the Control Yuan pointed out variously that the Ministry of Finance failed to consider the continuity and consistency of the government’s governance and actions; that it failed to maintain the harmonious co-gover- nance of government and private shareholders (thereby failing in its duty protect the best interests of all CBH shareholders); and that, ahead of the 2014 reelection of CHB's directors, it failed to engage sufficiently in negotiations to communicate and coordinate with CHB’s shareholders. These failings caused controversy and damaged the government’s image of integrity. 2016 ： The Taiwan Taipei District Court confirmed in its judgment that a contractual relationship exists, considering that “as long as the Taishin Financial Holdings is the largest shareholders of CHB, the Ministry of Finance must not interfere the representatives appointed by Taishin Financial Holdings from being elected as the majority on the Board of Directors of CHB.” 2017 ： The Taiwan High Court declared the existence of the contractual relationship, requiring that “as long as the shares held by Ministry of Finance in CHB remain unsold, and as long as Taishin Financial Holdings remain the largest sharehold- ers of CHB, the Ministry of Finance must support that the representatives appointed by Taishin Financial Holdings to become elected as the majority of the ordinary members on the Board of Directors of CHB”. The Ministry of Finance refused to accept the judgment and appealed to the Supreme Court. 2019 ： The Supreme Court reversed Taiwan High court's judgment that confirming there is a contract existing between MOF and the Company and the responsibility for total litigation expenses, and remanded the case to Taiwan High court; in its judgment, the supreme court opined that whether a contract between two parties is a voting agreement, and whether a contract running for 13 years to date has violated public policy or morals both remain open question. 2020 ： The Board of Directors of CHB approves to convert the privately placed 1.4 billion shares of preferred stock which issued in 2005 into public placed shares and apply to the Stock Exchange for listing. Taishin reiterated its intention to cooper- ate with government policy. Our approaches to safeguarding shareholders' rights and progress report ● Conduct Enhancement Program for Financial Advisors Competent authority, Investor, customers, media Stakeholder Type Concerned Issues Time of Query Taishin's Response Reporting to competent authority, e-mail/physical mail, customer service call How to prevent improper conduct by financial advisors in the future? Whole year, 2019 On November 7, 2018, a case concerning misappropriation of client funds and anomalous transactions with client funds involving a former financial advisor of Taishin Bank Xinzhuang Branch was filed as a criminal case with the Taiwan New Taipei District Prosecutors Office. Also, a record was made and a case procedure was completed at the New Taipei City Field Division, Ministry of Justice Investigation Bureau to safeguard the rights and interests of our customers and our bank. The employee concerned was dismissed on November 1, 2018 for violating Article 5 “regarding customer privacy protection” of our Employee Code of Conduct and Article 11, paragraph 4 “regarding breach of labor contract and work rules” of the same code. Although this case concerned a breach by an individual, Taishin Bank immediately took a number of measures (including improving internal processes and enhancing real-time control mechanisms), as follows: Strengthened education and training. From the end of 2018 to the end of 2019, we strength- ened the awareness of operations, security control, and legal compliance concepts among our supervisors and staff at all levels. A total of 8 offline courses on "Strengthening Operational Quality and Security Control Concepts" were conducted for branch operations supervisors, sales supervisors and branch managers. 249 supervisors were trained. We re-educated 1,171 branch operations and sales staff to ensure that they all truly understand the spirit and importance of security control and operational risk. This course also included a mandatory course for new branch staff to ensure they all under- stand the importance of security control and operational risk. With regard to strengthening the awareness and understanding of business manage- ment and sales staff’s regulatory compliance concepts among our branch managers and financial advisors across Taiwan, the President of Taishin Bank, the deputy chief executive of the Personal Finance Department, the executive and deputy chief executive of the Channel Operations Department and other senior managers provided education and training to 920 staff members through seven sessions on “Internal Control and Operational Principles for the Prevention of Misappropriation of Customer Funds by Financial Advisors of the Bank” (dubbed the “Ten Commandments”) in order to strength- en management and control and sternly warn managers and supervisors that violation of regulations will be severely punished in accordance with those regulations.