Wed, Sep 21, 2011 - Page 11 News List

Fubon Financial’s control mechanisms to be probed

PUNISHMENT PENDING:The FSC did not reach a decision on penalizing Fubon Financial Holding, saying it would depend on the outcome of an inter-ministerial meeting

Staff Writer, with CNA

The Financial Supervisory Commission (FSC) yesterday said it would probe Fubon Financial Holding Co’s (富邦金控) internal control mechanisms and urged the company to strengthen its internal oversight in the wake of claims of fraud out of its sports lottery unit’s recent fraud scandal.

However, the commission yesterday did not reach a decision on penalizing Fubon Financial over the fraud, saying Taiwan Sport Lottery Corp (運彩科技) falls under the jurisdiction of the Sports Affairs Council.

The commission said whether to mete out a penalty against Fubon Financial would depend on the conclusion of an inter-ministerial meeting hosted by the council over the next few days to determine whether the holding company’s management was at fault in the scam.

“The commission will send representatives to join the meeting,” commission Secretary-General Lin Tung-liang (林棟樑) told a press conference yesterday. “The FSC will help determine if the Sport Affairs Council needs help.”

The commission’s remark came after Premier Wu Den-yih (吳敦義) promised lawmakers earlier yesterday that the government would investigate the scandal and punish those involved in a bid to rebuild the public’s confidence in the sports lottery system, while FSC Chairman Chen Yuh-chang (陳裕璋) said during a question-and-answer session at the legislature that the commission would help investigate the issue.

Hong Chu-min (洪主民), who replaced Paul Chai (翟小璧) as president of Taiwan Sport Lottery, said the company would improve its internal control measures to rebuild confidence among the public.

Hong added that the company also planned to launch new promotional activities to attract interest and would cooperate closely with prosecutors in the investigation.

The case, which was exposed late last week, involves a Taiwan Sports Lottery assistant manager, Lin Hao-chin (林昊縉), who is accused of defrauding the lottery by operating a scam ring that allowed his accomplices to bet on sporting events after the results were known.

Lin was responsible for opening and closing the betting system, police said. He was fired on Aug. 23, a few weeks before the fraud claims came to light.

Prosecutors launched an investigation into the case on Saturday and Lin surrendered to the police on Monday.

One of his alleged accomplices, who is said to be girlfriend, turned herself in to police after being subpoenaed.

Lin allegedly ran the scam seven times between June and last month and is believed to have defrauded the lottery of about NT$3.73 million (US$125,000) during that time, according to police

He cashed about NT$430,000 of that amount, police added.

Executives of Taiwan Sport Lottery and Fubon Financial apologized on Sunday for the alleged scam.

Fubon Financial has two years remaining on its six-year contract with the central government to run the sports lottery system.

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