The Financial Supervisory Commission (FSC) yesterday fined Jkopay Co (街口電子支付) NT$1.8 million (US$63,420) over poor internal controls and suspended its chairman, Kevin Hu (胡亦嘉), for a year.
That is the second time the commission has punished Hu after it in September last year ordered his removal as a board member of Jko Asset Management Co (街口投信) for launching an illegal investment service, Tuofu Bao (託付寶).
The latest punishment came after the commission initiated an investigation in May 2019 and found that Jkopay had offered 12 loans totaling NT$483 million to its parent company, Jko Fintech Co (街口金融科技), from Feb. 9, 2018, to May. 9, 2019, on Hu’s instructions, Banking Bureau Deputy Director-General Lin Chih-chi (林志吉) said.
Photo: Bill Chen, Taipei Times
Hu also chairs Jko Fintech.
The practice was a breach of Jkopay’s internal controls set in September 2016 requiring all loans to be discussed and approved by the board, Lin said.
The commission in July 2019 warned Jkopay that its loan practices were not appropriate and a breach of its internal controls, Lin said.
However, Jkopay continued to go its own way, providing another eight loans totaling NT$292 million to Jko Fintech from Oct. 24, 2019, to Jan. 31 last year without the board’s approval, he said.
“The loans were all short-term and Jko Fintech had repaid them,” Lin said. “Jkopay’s offering loans to others did not bother us, but the company’s and Hu’s neglect of the firm’s internal controls did.”
Overall, Jkopay had lent Jko Fintech NT$775 million via 20 loans, Lin said.
Hu last month told the commission that he had been authorized by the board to make loan decisions since late 2017, but the commission rejected his explanation as the company’s internal controls ban such authorization, Lin said.
The minutes of a board meeting in August last year showed that one board member raised questions about the loans, but Hu did not clear up the board member’s concerns, Lin said.
Hu said in a statement yesterday that the commission abused its power by levying a fine that was not proportional and he would take legal action to protect the company’s interests.
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