The Legal System of Compulsory Takeovers: An Analysis of Compulsory Takeovers of Financial Institutions and Public Infrastructure
Date Issued
2014
Date
2014
Author(s)
Chang, Jen-Lung
Abstract
The role of a state evolved from a night watchman state of the 17- 18th century to a welfare state in the 20th century, by which people enjoyed more benefits granted by the state. However, the continuously extended grants have caused an excessive load for the state, leading to the sprout of the concept of “Ensuring State” (Gewahrleistungsstaat) during the end of the 20th century, i.e., the duties of a state can be conducted by a private entity. To ensure the grants of public services without being interrupted, however, the state has the responsibility to takeover and continues the condition, when public welfare was damaged due to serious deficiency in conducting the public duties by a private entity. The responsibility of takeover, also known as “the ultimate responsibility or intervening responsibility of the state”, shall be only for purpose of backing up or supplement.
Three patterns may characterize Taiwan government’s interception of the abnormal financial institutions during the period of the 1970s to 2000s: I. continuing amending the laws to deal with the abnormal financial institutions; II. Using flexible measures by the authorities; III. Lacking of a closure mechanism. Since the scandal case of Taipei Tenth Credit Cooperative in 1985, there had been several successive major financial crises that attracted the attention of the public and led to the amendment of the Banking Act in 2000, which granted the authorities more diverse power to engage in financial examination. In the light of the Chinese Bank scandal occurring in 2007, which reveals that financial crime skill is keeping renewed, the authorities’ financial examination methods also need to be improved by frequently reviews and correction.
Taiwan''s main legal regulation for compulsory takeover of public infrastructure is the related provisions in “Act for Promotion of Private Participation in Infrastructure Projects.” Compulsory takeover aims to maintain the incessant service of public infrastructure, and is not to punish the contract violation of private investment corporations or to seize the rights and interests of private investment companies or any third party. In August, 2007, Taipei City Government compulsorily took over Taipei Arena with over two hundred policemen, which was the first case of the local government''s compulsory takeover of a private enterprise in Taiwan. However, it is arguable whether its administrative execution measure in accordance with “Self-Government Ordinances of Consigned Operation and Management of Taipei Municipal Property” for takeover conformed to the principle of proportionality. Moreover, it is not uncontroversial whether “Self-Government Ordinances of Consigned Operation and Management of Taipei Municipal Property” complied with the principle of legal reservation. Furthermore, the compulsory takeover procedure of Taipei City Government did not provide the party that was taken over any opportunity to express its opinions, which also violated the due process of law.
In conclusion, the study proposes six suggestions as follows: I. The regulation of compulsory takeover of “Act for Promotion of Private Participation in Infrastructure Projects” is primitive and does not meet the principal of legal reservation and the principle of legal certainty. Such omission of legislation needs to be remedied as soon as possible by referring the takeover regulations provided in the Banking Act, II. The nature of compulsory takeover, the supplement and last resort, shall be strictly obeyed, III. The legal requirements of the compulsory takeover shall be strictly interpreted and typificated, IV. To realizing the requirement of due process of law under the rule of law (Rechtsstaat), the parties being taken over shall be allowed with the opportunities to express their opinions during the compulsory takeover procedure; V. The government''s compensation measures and mechanism after compulsory takeover shall be established; VI. The compulsory takeover act of the local government shall be regulated by the legislation of the central government to conform to the principle of legal reservation.
Subjects
強制接管
擔保國家
金融機構
公共建設
法治國
小巨蛋
Type
thesis
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