Wed, Jan 10, 2007 - Page 3 News List

Lawmakers slam finance officials

By Flora Wang and Shih Hsiu-chuan  /  STAFF REPORTERS

Legislators across party lines yesterday panned the government's financial management over the Rebar Group saga, with pan-blue lawmakers demanding that top-ranking government officials step down to assume responsibility for the debacle.

Several Democratic Progressive Party (DPP) legislators took Premier Su Tseng-chang (蘇貞昌) to task over the matter and urged him to show some "guts and resolve" by punishing officials from the Financial Supervisory Commission (FSC).

Two of the Rebar Asia Pacific Group's (力霸亞太企業集團) subsidiaries recently filed for insolvency protection.

This in turn triggered a bank run on another group member, The Chinese Bank (中華銀行). The bank was then taken over by the government through the Central Deposit Insurance Corp last Friday.

Rebar Group chairman Wang You-theng (王又曾), who fled to China the day after the two Rebar Group companies applied for insolvency, was charged with having walked away with NT$800 million (US$24.4 million) from The Chinese Bank.

DPP Legislator Charles Chiang (江昭儀) told a press conference that aside from public demand that Wang and his family be dealt with strictly, Su should also demand the punishment of FSC officials for derelection of duty.

"The Chinese Bank had been in trouble for a long time," he said. "How did [Wang] manage to walk away with the money?"

Chiang said that the FSC should have taken over or supervised the bank instead of "sitting on a landmine."

"Premier Su, you did not meet public expectations in terms of financial management," Chiang said.

"We hope you can show some resolve [in dealing with the matter]," Chiang added.

DPP Legislator Yu Jan-daw (余政道) said he suspected some government officials or legislators might have been helping the bank to cover up its poor financial conditions.

DPP Legislator Wu Ming-ming (吳明敏) said the government should limit the operations of "problematic financial organizations" to prevent the public from suffering the consequence.

In a separate press conference, Chinese Nationalist Party (KMT) Legislator Tsai Chin-lung (蔡錦隆) called for FSC Chairman Shih Jun-ji (施俊吉) and Minister of Finance Ho Chih-chin (何志欽) to assume responsibility and step down.

"As The Chinese Bank has been under government supervision for five years as Shih himself said, why was there a run on the bank?" he asked.

"[It happened] because the government does not take financial management seriously," Tsai added.

"Shih should take responsibility for this," Tsai added.

KMT Legislator Chi Kuo-tung (紀國棟) asked that Ho be held accountable for the incident as he said that Ho didn't even know the size of the Financial Restructuring Fund.

"The [Financial Restructuring Fund] is supposed to facilitate the restructuring or liquidation of poor-quality assets in the banking industry, but the government has only used the fund to salvage banks whose assets had been stolen by the banks' management," Chi said.

People First Party lawmakers also called a press conference, issuing the same demands.

"The legislature had given the government the carrot and stick it said it needed to maintain financial order. But why did it let The Chinese Bank incident happen?" asked PFP Legislator Liu Wen-hsiung (劉文雄).

Liu was referring to the fund as the carrot and the financial regulator as the stick.

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