The central bank and the Financial Supervisory Commission (FSC) yesterday rejected allegations that central bank Governor Perng Fai-nan (彭淮南) had meddled in the investigation into Mega International Commercial Bank’s (兆豐銀行) contravention of US money laundering regulations.
After Mega Bank was fined by the New York State Department of Financial Services (DFS), commission Vice Chairman Kuei Hsien-nung (桂先農) on Aug. 4 asked the central bank to assist with communications with the department, the commission and central bank said in separate statements.
Upon learning that state-run Mega Financial Holding Co (兆豐金控) was facing a massive fine, Perng coordinated a meeting between New York state officials and directors from the central bank’s and the commission’s New York offices the following business day, the statements said.
STATEMENTS
“The Financial Supervisory Commission and central bank’s directors asked the DFS to allot adequate time for Mega International Commercial Bank to run through the processes required before its consent order may be signed, as the bank is a subsidiary of a publicly traded company,” the commission said in its statement.
Perng had also communicated with the US Federal Reserve on behalf of Mega Bank, but he did not intervene in the subsequent personnel reshuffle at the holding company, the central bank said.
The two statements came after media personality Clara Chou (周玉蔻) said Perng had protected Mega Financial chairman Shiu Kuang-si (徐光曦), who is his brother-in-law.
Perng’s and Hsu’s wives are sisters, and this connection motivated Perng to act on behalf of Hsu, she said.
Chou also questioned whether it was appropriate for Hsu to be involved in the investigation, given that the violations occurred while he was president of Mega Financial.
TASK FORCE
In other developments, the commission said the task force investigating Mega Financial yesterday met for a second time.
The task force has questioned 28 persons of interest and their accounts are to be checked against those given by Mega Financial managers, the commission said.
Officials from the commission’s Financial Examination Bureau are now in Panama to probe Mega Bank’s two branches in that nation, the commission said.
That probe is looking into alleged suspicious activities, including a large number of closed accounts, as well as whether the bank has remedied citations from previous examinations, the bureau said.
The probe in Panama is expected to be completed in the middle of this month, and officials would move on to investigate the bank’s New York branch, the commission said.
The commission said its report on efforts to counter money laundering by domestic banks would be completed before the end of next month.
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