Editorial: Law must be better enforced

Sun, Mar 03, 2013 - Page 8

Greed is often a secondary motivation for many financial crimes. Legal loopholes, lax law enforcement and administrative inaction appear to be the primary culprits behind the reoccurrence of such crimes. The question is how much more money must be stolen and how many more convicts must abscond from Taiwan before these problems can be fixed and such situations avoided?

Two days ago, three fund managers at First Securities Investment Trust Corp (First SITC) were found to have irregularly handled assets under their management last year by colluding with Prescope Technologies Co, which operates in the high-tech industry and trades its shares on the nation’s over-the-counter market. Their illegal activities have gained them about NT$4 million (US$134,830) in kickbacks, but caused a loss of more than NT$20 million in mutual funds under their management.

The latest issue is reminiscent of another incidence of asset mishandling by a fund manager at ING Securities Investment and Trust Co (ING SITC), which was uncovered late last year. In that case, former ING SITC vice president Sam Hsieh (謝青良) and his peers at other trading houses made personal profits by manipulating the share prices of Ablerex Electronics Co, a power supply equipment supplier, via dummy accounts. Their actions caused more than NT$210 million in losses to the government-run Labor Insurance, Labor Pension and Public Service Pension funds in 2010, for which ING SITC was entrusted by the government with securities investment.

Meanwhile, earlier last week, Wan Chung (萬眾) became another fugitive reportedly having fled to China before he was to begin serving a three-and-a-half-year prison term in Taiwan.

Wan was allegedly extending high-interest loans to companies and individuals who had been refused credit at normal banks. Between 1998 and 2001, he was also allegedly involved in coercion, illegal debt-collecting and violations of the Organized Crime Prevention Act (組織犯罪防制條例).

Prior to his absconding, several convicts of financial crimes went on the run, the most recent case being former independent lawmaker Lo Fu-chu (羅福助), who did not report to prosecutors in April last year to begin serving a four-year jail term for forgery, stock manipulation and money laundering. He has since gone missing and is supposedly hiding in China.

The financial and judicial authorities responded to the news by saying they would look into the issue and take necessary measures to stop them recurring. For instance, the Financial Supervisory Commission said on Friday that it would mete out penalties and fines to First SITC and its three managers if the fraud allegations proved true, while the Ministry of Justice admitted there are blind spots in the monitoring system of convicts. It added that it was drafting measures to plug the loophole in the Code of Criminal Procedure (刑事訴訟法). However, does that not sound all too familiar?

No one would oppose the authorities’ efforts to fight financial crime and keep such convicts where they should be. However, the penalties that authorities have implemented have not proved stringent enough to prevent potential frauds, and the government’s efforts to fix the legal loopholes are too slow to ensure enforcement of the law. The same excuses heard repeatedly from the government will not win the public’s trust. People continue to see financial crimes occurring and high-profile convicts absconding.

Perhaps it is not just the financial and judicial authorities that are incapable of dealing with financial crimes, but also the Legislative Yuan.

One has to wonder if the nation’s lawmakers are too short-sighted to recognize the impact of such illegal activities on the economy, or whether they are just too lazy to do anything to deal with the problem. Is our government so spineless that these wrongdoings must continue? Action is needed, not more talking.