Sun, Sep 18, 2016 - Page 1 News List

Former FSC officials to be probed over Mega Bank

TASKFORCE:A meeting tomorrow is to decide what measures should be taken against former FSC officials should they be found complicit in the Mega Bank case

By Lee Hsin-fang and Jake Chung  /  Staff reporter, with staff writer

Chinese Nationalist Party (KMT) Legislator William Tseng speaks to the media on Aug. 29 about Mega International Commercial Bank before hosting a forum on the feasibility of listed companies publishing salary standards and salary adjustments at the legislature in Taipei.

Photo: Chang Chia-ming, Taipei Times

Premier Lin Chuan (林全) yesterday issued a directive to investigate former Financial Supervisory Commission (FSC) high-ranking officials for alleged negligence in overseeing Mega International Commercial Bank (兆豐銀行), after it was fined by the New York State Department of Financial Services (DFS).

The Executive Yuan said in a statement that a list of punitive measures announced on Wednesday against officials of Mega Bank and its parent company, Mega Financial Holding Co (兆豐金控), was the result of preliminary administrative investigations, adding that the political responsibility of officials from the FSC and the Ministry of Finance would be examined.

A task force is to investigate possible money laundering, insider trading and vulture-capitalist activities, Lin said, adding that the probe would not be limited in scope.

Sources said that task force members were of the opinion that Mega Bank had serious internal management issues, which could mean that commission officials appointed by former president Ma Ying-jeou’s (馬英九) administration could be implicated.

Despite claiming ignorance of the bank’s failure to comply with regulations, the commission could not be entirely outside the loop, the Executive Yuan said, adding that the FSC is responsible for overseeing financial institutions.

The DFS fined Mega Bank’s New York branch US$180 million late last month. The branch was found to have breached the US Bank Secrecy Act.

At a meeting on Saturday last week, an Executive Yuan monitor investigating the incident said that former Mega Bank chairman Mckinney Tsai (蔡友才) was clearly responsible, as he had known about the situation, but failed to correct it.

The monitor called for civil lawsuits to be filed against Tsai.

Those at the meeting said that Mega Bank should not be cleared of responsibility and asked the ministry and the commission to propose a draft measure to reinforce bank oversight and management.

The commission on Wednesday announced the first wave of punitive measures and removed Tsai, former Mega Financial chairman Wu Hann-ching (吳漢卿) and four others from their positions.

However, critics and pan-green camp supporters said the punishments have not gone far enough and that the commission has not looked into the responsibility of those within the FSC.

The Executive Yuan named former FSC chairman William Tseng (曾銘宗) and former minister of finance Chang Sheng-ford (張盛和) as examples of people who might be called in during the administrative investigation.

The task force would have more concrete measures pending a meeting tomorrow, Executive Yuan officials said.

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