Fri, Jul 14, 2006 - Page 12 News List

FSC metes out fines to lenders

PUNISHED Taiwan Business Bank, Chinatrust Commercial Bank, Taishin International Bank, Land Bank of Taiwan and Shin Kong Insurance Co were fined more than NT$11m

By Amber Chung  /  STAFF REPORTER

The Financial Supervisory Commission yesterday fined a number of local lenders a total of NT$11.8 million (US$362,230) for their poor internal controls and lack of legal compliance.

Taiwan Business Bank (台灣企銀) was fined NT$3 million after one of its employees embezzled a total of NT$11 million from the bank's clients over eight months, a fact the bank itself discovered in March.

The employee was fired and faces legal proceedings, while the bank's Lujou (蘆洲) branch in Taipei County will be prohibited from doing business in entrusted securities investments until improvements in its internal controls are made, the commission said.

Chinatrust Commercial Bank (中國信託商銀) and Taishin International Bank (台新銀行) were fined NT$2 million each.

The commission punished the two lenders because it said their debt collection agencies were threatening, insulting and harassing debtors.

The financial watchdog again reminded banks of their obligation to choose the companies they outsourced their collection services to very carefully and to oversee their operations. The banks bore the responsibility if their agents infringed on their clients' rights and interests, the commission said.

Land Bank of Taiwan (土地銀行) was fined NT$2 million for mistakenly registering several large deposits from a corporate account into a personal account and failing to spot and correct the mistake through its audit system last month, the commission said.

The lender's grave error had in part led to the controversial resignation of Shih Che (史哲) from his position as president of the Bureau of Labor Insurance, as his bank account was discovered to have suddenly swollen by NT$391 million.

Shin Kong Insurance Co (新光產險) was fined NT$1.8 million for allowing two of its land assets to remain idle for a period exceeding the regulatory limit of two years.

The insurer was also punished for failing to report its actions to the authority, thereby violating the Insurance Law (保險法) that aims to reduce investment risks and facilitate development and construction, according to the regulator.

Meanwhile, the regulator said it would scrap an earlier punishment meted out to China Development Financial Holding Corp (中華開發金控) after the company made the required changes to the composition of its board.

Daniel Wu (吳春台) announced on Wednesday night that he would resign from his directorship of the financial holding firm and its subsidiaries as the regulator had demanded.

China Development's appointment of Tsao Wei-shih (曹為實) as the company's new president would not be approved until after Wu's resignation was received, the commission said.

The regulator said last month that it would overrule all applications by China Development, including business expansion and investment plans, until the company followed the regulator's ruling and dismissed Wu from its board and the boards of its affiliates for his failure to avoid a conflict of interest in a hostile takeover attempt.

This story has been viewed 4911 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top