The Financial Supervisory Commission (FSC) yesterday fined China Development Financial Holding Corp (中華開發金控) NT$20 million (US$666,756) and suspended its chairman over poor internal controls.
The company’s management team was found to have given major shareholder Angelo Koo’s (辜仲瑩) secretary inside information about the conglomerate’s banking, insurance and securities units from October 2020 to October last year, Banking Bureau Director-General Sherri Chuang (莊琇媛) said.
The data also included company plans to acquire China Life Insurance Co (中國人壽), employees’ performance assessment and payroll information, Chuang said.
Photo courtesy of China Development Financial Holding Corp
The commission said its investigation did not show that Koo made copies of internal data or took actions based on the information, but the possibility cannot be ruled out.
“As major shareholders hold significant control over a company, we do not bar them from knowing the companies’ business or obtaining information, but they should get the information from their representatives on the board, rather than directly from management,” Chuang said.
It is against the principles of corporate governance for management reports to be given directly to major shareholders, she added.
Chuang said company management gave internal information to Sherie Chiu (邱德馨) and Yu Shan-jung (余珊蓉), aides of Koo who were not eligible to receive such information.
The commission also suspended chairman Chang Chia-juch (張家祝) for six months for his failure to supervise the company, and cut general manager Stefano Paolo Bertamini’s monthly salary by 30 percent for three months, it said.
Chang has served as chairman for almost six years, while Bertamini has been a general manager for about a year, Chuang said.
Koo is chairman of CDIB Capital Group (中華開發資本), the company’s investment unit, where Yu is executive vice president, Chuang said, adding that Chiu does not hold a position there.
As CDIB is an investment company, the commission would not suspend Koo, but China Development Financial would seek compensation from the three, she said.
The company is required to submit a plan to improve its internal controls, she added.
The commission yesterday also fined China Life Insurance NT$6 million and KGI Securities Ltd (凱基證券) NT$2.4 million for poor internal controls.
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