The Financial Supervisory Commission was dealt a setback yesterday when the Taipei High Administrative Court reversed the commission’s order to oust Mckinney Tsai (蔡友才) from Mega International Commercial Bank’s (兆豐銀行) board of directors.
The commission would formulate a response after receiving a formal notice from the court, it said.
Tsai, who also served as chairman of the lender’s parent company, Mega Financial Holding Co (兆豐金控), became the first plaintiff to win a wrongful dismissal lawsuit against the commission.
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The case dates back to 2016 when the New York State Department of Financial Services uncovered breaches of money laundering rules at the bank’s New York branch under Tsai’s watch, resulting in a fine of US$180 million and prompting the commission to order his dismissal.
Market observers have said that the commission is unlikely to leave the matter uncontested.
If the final ruling is also in Tsai’s favor, a five-year ban preventing him from holding any key position at a financial institution would be lifted.
MISINTERPRETED
The court found that the commission misinterpreted and misapplied Article 61 of the Banking Act (銀行法) as the basis for Tsai’s dismissal, as the article is intended to regulate banks and prevent the institution from compromising the ability of the board of directors to provide effective oversight and fulfill its fiduciary duties.
The commision instead used the act to regulate Tsai as an individual, the court said in a statement.
The court also said that Tsai was not a member of the bank’s board of directors when the commission ordered his dismissal.
Tsai said he feels vindicated by the ruling.
However, he is still facing charges of insider trading, contravention of money laundering rules and breach of trust charges in related cases filed by the Taipei District Prosecutors’ Office.
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