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Leading Corporate Governance Research Firm, ISS, Endorses Management of Sanyang Industry (TPE:2206):

Sanyang Industry Co. Ltd. (TPE:2206) announced today that a leading proxy and corporate governance research firm, Institutional Shareholder Services (“ISS”) has recommended that shareholders vote Unanimously WITH Management on ALL agenda items, to vote FOR ALL MANAGEMENT Board Director and Supervisor candidates proposed by the Management, and to unanimously vote AGAINST ALL DISSIDENT candidates and resolutions proposed by the dissident shareholder group at the company’s upcoming June 18th annual shareholders’ meeting.

The ISS report analysed that a dissident group is trying to take control of the board and change the management but that there is “no compelling case why change is needed.” The report states that upon dissident members for the first time becoming board directors in 2011, the dissident directors, Chin-Yuan Wu and Lichuan Gao, then “had three years to demonstrate their ability to create value for shareholders.” However from high performance in 2011, “the company performance had worsened since they (Chin-Yuan Wu and Lichuan Gao) joined the board. Further, none of the (dissident) nominees have relevant industry skills and it is unclear how these candidates would create value for shareholders. Given the above concerns, a vote AGAINST ALL DISSIDENT nominees and FOR ALL MANAGEMENT nominees is warranted.”

ISS further noted a key complaint made to ISS by the dissident group about the management, regarding the attempt by current management to gain higher profit apportionment ratio on the Neihu Land Development Project with Mei Fu Development Co.,Ltd. (“Mei Fu”) through arbitration (from the current 46%:54%, Sanyang Group: Mei Fu). The dissident group complained to ISS that the dissident group believes apportionment ratio should remain unchanged even though the current apportionment ratio greatly undervalues the Neihu land owned by Sanyang Group and that the arbitration fee of TWD 10 million is a waste of company money. On this issue, the ISS report wrote, “Pursuing court arbitration for the Neihu land agreement may have cost the company TWD 10 million in fees, but such amount is negligible considering the value of the land and what the company could stand to gain. Between 2007 and 2013, the value of Neihu land has increased by TWD 7.1 billion. Attempting to gain a better bargain rather than leaving such a substantial value on the table is reasonable and is in shareholders’ interest.”

Sanyang Board Chairwoman, Ms. Y. M. Huang expressed, “I am very gratified to learn of the international community’s analysis and full support of our leadership team. Such a report from a well-respected, independent, international corporate governance research firm such as ISS, is a strong validation that the current management’s leadership direction, discipline, head, and heart are all in the right place.” She added further, “Despite distractions and disruptions from the dissident group over the last three years, the management and all our employees have been unwavering in our single-minded determination to fight for the best interest and long-term shareholder value of all our stakeholders. The main pillars of our value creation plan include: (1) optimization of our core business operations; (2) improved capital structure management; and (3) strengthened measures of corporate governance and management transparency. Our board director and supervisor candidates for the upcoming June board election, were carefully selected based on the breadth and depth of expertise, diversity, independence and integrity necessary to execute our three-pillar plan. As further demonstration of our single-minded focus on our core business and commitment to our shareholders only, we have asked shareholders to vote AGAINST RELEASE of board directors from non-compete restriction. Our request contrasts clearly from that of the dissident group who has asked FOR release of non-compete restriction on their candidates so that they may have positions in other companies where their activities may conflict or compete with Sanyang’s.” The Chairwoman concluded, “We are truly grateful to our shareholders for the support of our common vision and our proposed candidates to execute the vision. We will continue to be tireless and fearless in delivering long-term sustainable growth in our core business for the full benefit of all our shareholders!”

On the agenda to release board directors from non-compete restriction, ISS report recommends AGAINST the release. The report comments that, “as the dissident group’s objectives are unclear, non-compete restrictions could, if any of their nominees are elected to the board, provide some safeguard to shareholders’ interest.”

More information regarding the shareholders’ meeting is available on the Sanyang Industry IR web page. For English, please go to

For Chinese, please refer to

About Sanyang Industry

Sanyang Industry Co., Ltd., founded 60 years ago in 1954 by the grandfather of current Chairwoman, is the sole international enterprise in Taiwan that manufactures and sells both motorcycles and automobiles. Its manufacturing and sales network covers over 75 countries. Over the past half century, Sanyang has built an extensive sales and service network and has established strong alliances with other world class corporations. In the process, the Company has developed a deep roster of management talent and strong devotion from customers loyal to its brand. In a hyper-competitive era, the Company has maintained its roots firmly in Taiwan, while basing its blueprint for expansion on innovation, excellence and commitment to the greater good of human society.

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