Aeon irregular practices allegations investigated

CONTAINING DAMAGE::Aeon’s Taiwan branch said malpractices at the firm’s headquarters in Japan would not harm Taiwanese customers, an official said

By Crystal Hsu  /  Staff reporter

Tue, Sep 17, 2013 - Page 13

The Financial Supervisory Commission (FSC) is mulling punitive measures against the local unit of Aeon Credit Service Co, a leading Japanese credit card issuer, after demanding a timely and detailed report about embezzlement and other irregular practices.

The regulator made the statement after Aeon Taiwan’s top executive paid a visit to the commission on Friday last week, saying Japan’s headquarters will take full responsibility for any wrongdoing by local staffers and will keep the Taiwan branch in normal operation.

“We will take action against Aeon Taiwan after gaining better understanding of the irregularities,” a commission banking official said by telephone.

The local branch, due to submit a comprehensive report later this month, maintained the malpractices would not cause any harm to Taiwanese customers and the headquarters would bear all losses, the official said.

As of the end of July, Aeon Taiwan has a capitalization of NT$955 million (US$32.13 million) with 136,949 credit cards in circulation and overall charges of NT$1.98 billion, FSC data showed.

The 30-year-old Japanese credit card provider entered the local market in 2002. Aeon Taiwan currently has 100 employees.

The incident should have a very limited impact in Taiwan given the company’s small market share, the commission official said.

The official refused to speculate on potential fines and penalties.

The scandal came to light after Japan’s parent company conducted an internal inspection, the commission said in a statement over the weekend.

Some Taiwanese employees allegedly pocketed company money and padded financial statements, the commission official said, declining to give any numbers.

The local unit has business ties with retailers, restaurants, financial institutes and recreation facilities nationwide.