The Financial Supervisory Commission (FSC) yesterday ordered Yuanta Securities Corp (元大證券) to remove Judy Tu (杜麗莊) as chairperson after she was indicted by prosecutors on a charge of violating the Securities and Exchange Act (證交法) in a structured notes transaction four years ago.
The commission’s policy-making members yesterday also ordered that Lee Chang (張立秋), president of the local brokerage, and Miranda Wu (吳麗敏), senior vice president, be barred from practicing their profession for one year and half a year respectively over the same matter.
However, the three executives had already submitted their resignations late on Wednesday night.
FSC Vice Chairman Wu Tang-chieh (吳當傑) said the commission nevertheless had to mete out administrative punishment against the three, as it believed their involvement in the structured notes deal in 2005 had incurred losses for the firm.
“Tu will thus be disqualified from working as a board member at parent Yuanta Financial Holding Company (元大金控) or any other bank or financial service group within the next five years, or serving in any other securities-related position in the next three years,” Wu told a media briefing.
The commission will talk to three other top managers at the firm, including former Yuanta Bank (元大銀行) president Chen Chi-chang (陳麒漳), who were also indicted by prosecutors in the same trial, before deciding on administrative punishments for them, Wu said.
In a newspaper advertisement yesterday, Tu, wife of Yuanta Financial chairman Rudy Ma (馬志玲), denied any wrongdoing. She said her family had absorbed NT$1.15 billion (US$34 million) in losses from the structured notes deal, amounting to more than 82 percent of the total NT$1.398 billion in losses.
Taiwan Ratings Corp (中華信評), a local arm of Standard & Poor’s, has no plan to revise its current “stable” rating on Yuanta Financial, as current allegations have not yet had any discernible negative impact on the company’s earning performance, credit analyst Susan Chu (朱素徵) said yesterday.
Despite the controversy, shares of Yuanta Financial and Bank of Kaohsiung (BOK, 高雄銀行) yesterday rose slightly on the local bourse on investors’ positive prospects for the local banking sector, analysts said.
Two independent BOK board members Lin Wen-yuan (林文淵), a former chairman of China Steel Corp (中鋼), and Ho Mei-yueh (何美玥), former chairwoman of the Council for Economic Planning and Development, have also become embroiled in controversy.
The Chinese-language Apple Daily newspaper said in a front-page report yesterday that a Kaohsiung City councilor had expressed suspicion that the hefty salaries Lin and Ho had received for only occasionally attending board meetings might be linked to their political affiliations.
Lin and Ho are reportedly being paid NT$2 million per year.
The Kaohsuing City Government is the bank’s biggest shareholder.
The BOK’s spokespeople were not available for comment yesterday, although the city government insisted that both had been appointed on the strength of their professional backgrounds.
Analysts said Yunta Financial’s top management reshuffle and the allegations of political kickbacks at the BOK had little to do with the companies’ fundamentals.
“Overall, bank shares saw a rally today [Thursday] because of China prospects, such as the planned third round of cross-strait negotiations, in which Taiwan might ink a cross-strait financial memorandum of understanding with China,” Chen Yu-yu (陳育娛) of Capital Securities Corp (群益證券) said by telephone.