Sat, Aug 11, 2018 - Page 12 News List

Fubon Financial to redraw boundaries amid FSC inquiry

By Ted Chen  /  Staff reporter

Financial Supervisory Commission Chairman Wellington Koo smiles during an interview with reporters in Taipei yesterday.

Photo: Peter Lo, Taipei Times

Financial Supervisory Commission (FSC) Chairman Wellington Koo (顧立雄) yesterday said that Fubon Financial Holding Co (富邦金控) has two months to draw clearer boundaries between the company and its affiliated industrial enterprises.

Koo, a proponent of the separation of financial services firms and the industrial sector as a means to improve corporate governance, has come down hard on large conglomerates, including Fubon Financial and Far Eastern Group (遠東集團), following challenges from New Power Party (NPP) legislators, including Hsu Yung-ming (徐永明).

In spite of the commission’s policy direction, members of the conglomerates’ founding families have maintained a tight hold over their business empires, which span financial and industrial sectors, NPP lawmakers have said.

Fubon Financial chairman Richard Tsai (蔡明興) and Fubon Financial vice chairman Daniel Tsai (蔡明忠), who are brothers, also occupy the top jobs at Taiwan Mobile Co (台灣大哥大), with Daniel as chairman and Richard as vice chairman.

Taiwan Mobile is an affiliate of Fubon Financial and also one of the biggest local telecoms.

A probe into the board room records of Fubon Financial showed that the Tsai brothers could hold undue influence at both firms, the commission said.

“The probe showed that decisions to be submitted to the board of directors must first be reviewed by the chairman and the vice chairman, which could compromise the autonomy of the board of directors,” Koo said on the sidelines of a public hearing in Taipei yesterday.

Apart from acting on an interim basis during the chairman’s absence, the vice chairman should not be involved in matters of the board of directors, Koo said.

Under Fubon Financial’s structure, the vice chairman can block decisions from being submitted to the board of directors, he said.

While lawmakers also listed Far Eastern Group chairman Douglas Hsu (徐旭東), Koo said that Hsu has not crossed the line in his role as vice chairman at many affiliates of the conglomerate — which has operations in department stores, textile manufacturing, cement supplies, shipping services and telecoms.

Effective as of yesterday, Daniel Tsai was barred from granting approval for Fubon Financial’s day-to-day operations, the commission said.

Fubon Financial must also submit an action plan to the commission within two months and Daniel Tsai could be removed from his post if the company’s proposed measures are found to be inadequate, it said.

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