State-run Mega Financial Holding Co (兆豐金控) chairman Shiu Kuang-si (徐光曦) yesterday tendered his resignation amid mounting criticism over alleged conflicts of interests in the aftermath of a compliance failure that occurred while he was president of Mega International Commercial Bank (兆豐銀行).
Mega Financial is to call a board meeting today to elect an acting chairperson until the Ministry of Finance, the largest stakeholder in all state-run financial institutions, names a successor after approving Shiu’s departure.
Shiu, who assumed the Mega Financial chairmanship on Aug. 16, resigned one day after Premier Lin Chuan (林全) set up a supervisory panel to probe the breach of US money laundering rules by Mega Bank’s New York branch.
Photo: Huang Yao-cheng, Taipei Times
Mega Bank is the main subsidiary of Mega Financial.
“As the compliance failure took place during my term as Mega Bank president, my role to help is discredited with my supervisors also questioned,” Shiu said in his resignation letter.
Shiu said he would quit all positions at the state-run conglomerate and cancel trips to San Francisco to face a probe in Taiwan to protect his reputation.
The 64-year-old banker is currently on a visit to the US to inspect Mega Bank’s branches.
The resignation made Shiu the first official to take blame for the incident since the New York State Department of Financial Services on Aug. 19 fined Mega Bank’s local branch US$180 million.
Shiu voiced regret about the controversy, but dismissed charges that he is cleaning up a mess he helped create in 2012.
One day earlier, union workers at Mega Financial issued a letter asking Shiu to step down from his post while a probe is underway. However, union workers at Mega Bank disagreed, saying that Shiu should not be faulted because he left Mega Financial before US banking rules were changed last year.
Both unions called for changes to Mega Financial’s board of directors and those of its subsidiaries and affiliates, saying the boards tend to be packed with retired vice presidents or managers, weakening their oversight.
Deputy Minister of Finance Su Jain-rong (蘇建榮) said the ministry was surprised by Shiu’s resignation, but would respect and accept his wishes.
“Shiu tendered his resignation by fax [yesterday] morning before disclosing it in a stock exchange filing at 10am,” said Su, who earlier said he was not aware of the matter.
The ministry would not rule out shuffling all government-appointed directors in Mega Financial to strengthen their oversight and avoid compliance failures, Su said, adding that the ministry controls 10 board seats.
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