Mon, Jul 26, 2004 - Page 11 News List

'The Regulator' looks to the future

After coming into office on July 1, Kong Jaw-sheng, chairman of the Financial Supervisory Commission, led the newly established regulatory body through two major financial crises, involving Procomp Informatics Ltd and United Securities Investment Trust Corp. Kong last week talked with `Taipei Times' staff reporter Joyce Huang about his vision of the nation's financial future

By Joyce Huang  /  STAFF REPORTER

Kong Jaw-sheng, the chairman of the Financial Supervisory Commission, talks on a cellphone.

TAIPEI TIMES FILE PHOTO

Taipei Times: The private sector has high hopes for your commission, which operates as an umbrella organization to oversee the nation's banking, insurance and securities sectors. What makes you qualified for this new post?

Kong Jaw-sheng (龔照勝): My biggest challenge in chairing the commission is to shape a new service-oriented [regulatory] mindset and culture. After being appointed to the new job, both President Chen Shui-bian (陳水扁) and Premier Yu Shyi-kun have given me the authority to bring my financial expertise into play.

It appears that my past work performance [at foreign banks], personality and integrity had earned their trust in the first place. But I also believe that my professionalism and international perspective are what they see about me, that they hope may help me re-engineer the nation's financial regulatory system.

Though I am a freshman in terms of politics, I also have no political baggage and have a liberal attitude about pushing forward the ultimate goal of developing Taiwan into an Asia-Pacific regional financial-services hub.

In order to meet that goal, we must make breakthroughs over the next two years and remove obstacles, such as past failures to conform with international practices and national security concerns, that have hindered the development of local financial industries.

TT: Your past work experience with foreign banks might have been one of the key elements for you to outperform other potential candidates and win the post. How will the commission benefit from your financial connections?

Kong: I plan to follow the example of financial regulatory boards in countries such as Japan and England, and set up an international advisory board under the commission. I'd like to recruit some very well-known international financial gurus, such as Tony James, the vice chairman of the Blackstone Group -- a leading investment bank -- and William Donaldson, chairman of the US Securities and Exchange Commission to advise on Taiwan's financial regulatory reform. Both of them are good friends of mine, and I am sure they are willing to offer me some private advice, at the least [Editor's note: As SEC chairman, Donaldson is the chief regulator of US securities markets and the chief enforcer of securities laws]. Also, I hope to find the time to exchange views privately with domestic bankers including those from locally-based foreign banks and securities houses.

Profile

* 2003-2004: Chairman of the Taiwan Sugar Corp.

* 2003: Board director at both Taiwan Tobacco and Liquor Corp and Taiwan Stock Exchange Corp.

* 2000-2002: Managing director and Taiwan country manager for Credit Suisse First Boston.

* 1999-2000: Taiwan country manager for Donaldson Lufkin & Jenrette Inc.

* 1995-1999: President of the Taiwan unit of Lehman Brothers Holding Inc.

* 1991-1995: Senior executive at UBS Taiwan.

Source: taipei times


TT: Your commission's month-long investigation successfully uncovered Procomp Informatics Ltd's (博達科技) fraud, before you vowed to facilitate legal revisions, reinforce corporate governance principles and to set up an early-warning system in order to prevent similar crises from happening again. But how many similar time bombs are out there, that have escaped the commission's radar and may soon burst?

Kong: Let me first clarify this matter by saying that my commission is empowered with the right to examine and investigate financial crimes, but which are, nevertheless, under the court's jurisdiction. That's why [three of] our staffers from the bank examination bureau are collaborating with prosecutors to crack the case.

The court may not be familiar with the causes of financial and economic irregularities. After we present to the court our analysis of Procomp's financial crime beyond a reasonable doubt, we've done our duty, and we can't do anything more -- including leaking details of the analysis to the media. We just have to wait for the court's verdict.

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