Civil servants restricted from banking positions

The government's representatives in state-controlled financial institutions will be banned from taking up executive positions after the banks are merged or acquired by private financial institutions, as the legislature passed a measure yesterday designed to prevent conflicts of interest.

"The restriction is to prevent the government's representatives in the state banks from colluding with their private counterparts for the exchange of personal interest in merger talks, which would ultimately lead to national assets being sold cheaply," said Democratic Progressive Party Legislator Tsai Chi-chang (蔡其昌), who proposed the regulation in the Finance Committee at the legislature yesterday.

Since the government is getting rid of its stakes in a bid to halve the number of state-controlled banks to six by the year's end, the restriction is necessary to protect the nation's assets, Tsai said.

Therefore, officials representing the government at the banks will be prohibited from taking up positions that enjoy decision-making powers, such as chief executive officer or president or board director, in the surviving banks within three years of a mergers to prevent a conflict of interest.

More than 100 government representatives in the nation's financial institutions will be affected by the new restrictions, the Ministry of Finance said.

Currently, public servants are not allowed to serve in private companies whose operations are directly related to an industry they worked in within five years before they quit. They are also restricted from taking on an executive position, such as board director, superintendent or manager within three years of their resignation, according to the regulations of the Civil Servant Services Act (公務員服務法). three years after they resigned from

The stipulations, however, do not apply to government representatives in financial institutions.

The restrictions were inspired by the merger between TaipeiBank (台北銀行) and Fubon Commercial Bank (富邦銀行), Fubon Financial Holding Co's (富邦金控) banking arm, in 2003. Former TaipeiBank president Jesse Ding (丁予康), who was in charge of merger talks with Fubon at that time, became a board director representing Fubon, sparking speculation of collusion.

The Financial Supervisory Commission and the Ministry of Finance, which oversee the government's stakes in financial institutions said they have no particular viewpoint on the restriction.

Minister of Finance Lin Chuan (林全), however, said the government may find it difficult to find qualified individuals to serve as government representatives in the future because of the limitation.