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Taiwanese and U.S. Unions Urge Regulators to Halt Approval of Taiwanese Telecom Company Share Offeri
Taiwanese legislators mount constitutional challenge to sale
Washington, D.C. -- The Communications Workers of America and the AFL-CIO are joining with the Taiwanese Chunghwa Telecom Workers Union in calling on the Securities & Exchange Commission and state regulators to withhold approval of an offering of shares of Chunghwa Telecom Co., Ltd. (NYSE:CHT).
The unions are pointing out that the potential offering of shares of Chunghwa Telecom, currently a majority government-owned company, may put U.S. investors at risk, because of a legal and constitutional challenge brought by members of Taiwan's Legislative Yuan. U.S. regulators should withhold approval of the offering of American Depositary Shares – the instrument issued for shares of a foreign-owned company – until the constitutional challenge is resolved, the unions said.
At a news conference today in Taiwan, the Chunghwa Telecom Workers Union announced that one-third of Taiwan's Legislative Yuan are supporting the constitutional challenge, an action which requires a ruling by the Taiwanese judiciary.
"Given the uncertain legal outcome, the current effort to sell shares – now underway – may be considered to be fraudulent, since these shares may never be available for U.S. investors," said CWA Executive Vice President Larry Cohen. Cohen is president of the telecom sector of Union Network International, representing 2.5 million communications workers worldwide.
"Chunghwa and its lead investment banker Goldman Sachs are now asking U.S. regulators to approve a share offering that may be illegal under Taiwanese law," said AFL-CIO Secretary-Treasurer Richard Trumka. "Federal and state regulators have a duty to protect the U.S. capital markets from illegal transactions. We urge them to await the ruling from the Taiwanese judiciary before permitting the offering to go forward," he said.
"We should respect the new democracy in Taiwan and let that country determine the constitutionality of this issue before any further action is taken by financial interests in the United States to promote the offering of shares," Cohen said.
In addition to the constitutional challenge, the Taiwanese legislators are seeking a temporary restraining order on the share release. Last month, the Legislative Yuan passed a resolution that bars Chunghwa from moving forward with the proposed share offerings. This resolution follows an earlier resolution adopted in June 2004 that requires the company to reach an agreement with the CTWU before moving forward with its privatization.
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The Taiwanese Chunghwa Telecom Workers Union represents nearly 100 percent of the company's 28,000 employees.
CWA, with 700,000 members in telecom, information technology, media, and other sectors, has been working with Taiwanese unions for more than a decade.
The AFL-CIO represents more than 13 million working men and women in the United States. Union members participate in the capital markets as individual investors and through a variety of benefit plans. Union sponsored benefit plans have a total of more than $400 billion in assets.
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Washington, D.C. -- The Communications Workers of America and the AFL-CIO are joining with the Taiwanese Chunghwa Telecom Workers Union in calling on the Securities & Exchange Commission and state regulators to withhold approval of an offering of shares of Chunghwa Telecom Co., Ltd. (NYSE:CHT).
The unions are pointing out that the potential offering of shares of Chunghwa Telecom, currently a majority government-owned company, may put U.S. investors at risk, because of a legal and constitutional challenge brought by members of Taiwan's Legislative Yuan. U.S. regulators should withhold approval of the offering of American Depositary Shares – the instrument issued for shares of a foreign-owned company – until the constitutional challenge is resolved, the unions said.
At a news conference today in Taiwan, the Chunghwa Telecom Workers Union announced that one-third of Taiwan's Legislative Yuan are supporting the constitutional challenge, an action which requires a ruling by the Taiwanese judiciary.
"Given the uncertain legal outcome, the current effort to sell shares – now underway – may be considered to be fraudulent, since these shares may never be available for U.S. investors," said CWA Executive Vice President Larry Cohen. Cohen is president of the telecom sector of Union Network International, representing 2.5 million communications workers worldwide.
"Chunghwa and its lead investment banker Goldman Sachs are now asking U.S. regulators to approve a share offering that may be illegal under Taiwanese law," said AFL-CIO Secretary-Treasurer Richard Trumka. "Federal and state regulators have a duty to protect the U.S. capital markets from illegal transactions. We urge them to await the ruling from the Taiwanese judiciary before permitting the offering to go forward," he said.
"We should respect the new democracy in Taiwan and let that country determine the constitutionality of this issue before any further action is taken by financial interests in the United States to promote the offering of shares," Cohen said.
In addition to the constitutional challenge, the Taiwanese legislators are seeking a temporary restraining order on the share release. Last month, the Legislative Yuan passed a resolution that bars Chunghwa from moving forward with the proposed share offerings. This resolution follows an earlier resolution adopted in June 2004 that requires the company to reach an agreement with the CTWU before moving forward with its privatization.
###
The Taiwanese Chunghwa Telecom Workers Union represents nearly 100 percent of the company's 28,000 employees.
CWA, with 700,000 members in telecom, information technology, media, and other sectors, has been working with Taiwanese unions for more than a decade.
The AFL-CIO represents more than 13 million working men and women in the United States. Union members participate in the capital markets as individual investors and through a variety of benefit plans. Union sponsored benefit plans have a total of more than $400 billion in assets.
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