In a surprise move by the Executive Yuan last night, Financial Supervisory Commission (FSC) Chairman Kong Jaw-sheng (龔照勝) was suspended and assigned for disciplinary action over alleged irregularities while he was chairman of the state-run Taiwan Sugar Corp (台糖).
Kong also failed to perform his duties in overseeing the work of his subordinates, such as Lee Ching-cheng (李進誠), former director-general of the commission's Examination Bureau, who resigned in July last year over suspected involvement in illegal share trading, the Executive Yuan said in a statement released at 9pm yesterday.
The decision was made based on the Law on Discipline of Civil Servants (
FSC Vice Chairman Lu Daung-yen (
The Executive Yuan's decision came despite remarks by Premier Su Tseng-chang (
"Chairman Kong came to work as usual today," the commission's acting spokesperson Amy Chin (
In response to a question about whether Kong had made any comments on whether he would step down, Chin said that she could not speak on his behalf.
Kong attended neither the regular FSC meeting nor the press conference yesterday.
Earlier yesterday, Su said that Cabinet members should all strive for impeccable moral standards, and that he believed Kong was "wise enough to make the right decision."
Kong was released on bail of NT$500,000 after being interrogated for more than 10 hours by the Taipei District Prosecutors' Office, which is investigating claims of conducting public business for private gain, also known as jobbery, against Kong during his chairmanship at the state-run Taiwan Sugar between December 2003 and June 2004.
Kong is suspected of involvement in three cases of jobbery, including supplying upscale Taiwan Sugar cosmetics products to a certain company without going through the regulatory procurement process.
He is also suspected of illegitimately bypassing government procurement requirements and hiring his sister-in-law as consultant to Taiwan Sugar's coffee-shop business, which has been losing money for the company.
"It is quite clear that Chairman Kong does not have many choices after what Premier Su said, and with the growing demand for integrity in the Democratic Progressive Party (DPP) and society as a whole," DPP Legislator Tsai Chi-chang (蔡其昌) told the Taipei Times yesterday.
Kong, 51, was the first head of the FSC, an unprecedented, independent government organization that had been established to consolidate and govern policymaking and supervision of the nation's finance sector and capital markets in July 2004.
Prior to joining the public sector, Kong was a seasoned banker with 20 years of experience, including such positions as country manager for Credit Suisse First Boston (CSFB) and president of Lehman Brothers Holding Inc's Taiwan unit.
Kong began to develop close ties with and to stump for the then presidential candidate Chen Shui-bian (
His close relationship with the Chen administration, however, upset Beijing, which barred the Zurich-based Credit Suisse Group AG from participating in deals in China in 2001 and cost Kong his coveted job in April 2002.