Tue, Mar 05, 2013 - Page 13 News List

Ministry requests state-run firms tighten controls

By Amy Su  /  Staff reporter

The Ministry of Finance has requested all state-run securities investment trust firms and securities corporations conduct thorough disciplinary investigations within two weeks, following the market manipulation scandal at First Securities Investment Trust Corp (第一金投信), a ministry official said yesterday.

However, the ministry has no plans to punish any staff of First Financial Holding Co (第一金控), following the company’s board of directors’ decision to approve the resignation of First Securities Investment Trust chairwoman Hung Hsin-shih (洪新湜), the official said.

“We have asked state-run financial holding companies to carefully scrutinize their investment-related departments in their banking, insurance, securities and securities investment trust units, both in the institutional and individual markets,” Vice Minister of Finance William Tseng (曾銘宗) said by telephone.

Tseng said state-run financial holding companies have to deepen their internal audit processes, strengthen discipline and monitor the behavior and the financial positions of their employees.

However, Tseng did not say if the ministry would require any more First Financial employees to resign over the scandal.

Minister of Finance Chang Sheng-ford (張盛和), who expressed his shock and anger at the scandal, said the ministry had asked First Financial to resolve problems related to the scandal as soon as possible.

Chang said the ministry had instructed state-run financial holding companies to tighten internal controls in November last year, after local media reported that four fund managers involved in the handling of four government funds may have engaged in illegal trading activity by manipulating Ablerex Electronics Co (盈正豫順電子) shares via dummy accounts.

However, the latest scandal clearly indicated that inadequate supervision remained in some cases, despite all state-run financial holding companies reporting “no anomalies” in response to the ministry’s request, Chang said.

The ministry will also cooperate with the Financial Supervisory Commission to restore effective operations of state-run securities investment trust companies, he added.

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