Prosecutors yesterday summoned former Mega Financial Holding Co (兆豐金控) chairman Mckinney Tsai (蔡友才) for questioning, and restricted him from leaving the nation, after the state-run company’s New York banking branch was ordered to pay a massive fine for violating US rules against money laundering.
Mega Financial chairman Shiu Kuang-si (徐光曦) was also summoned by prosecutors for questioning, the Taipei District Prosecutors’ Office said.
Prosecutors yesterday sent investigators to gather details regarding the case at the Financial Supervisory Commission, the Ministry of Finance and Mega Financial, and listed Tsai as a defendant as they investigate possible violations of the Money Laundering Control Act (洗錢防制法), Banking Act (銀行法) and the Financial Holding Company Act (金融控股公司法).
The New York State Department of Financial Services (DFS) on Friday announced that it has imposed a US$180 million fine on Mega International Commercial Bank’s (兆豐銀行) New York branch.
The branch was found to have breached the US Bank Secrecy Act.
Mega bank is the flagship banking unit of Mega Financial Holding.
Tsai said in a statement that he fulfilled all of his responsibilities as the company chairman prior to his departure in March.
Tsai announced his resignation one month after Mega bank received an examination report from the DFS, in which the New York regulator said that it had identified a number of suspicious transactions between the bank’s New York and Panama branches, and that a substantial number of the bank’s accounts were opened with the assistance of Mossack Fonseca, a Panama-based law firm that had facilitated shell company activities.
Mega bank’s infraction was a failure to meet regulatory filing requirements, Tsai said, adding that the bank was not accused of money laundering.
Mega bank was fined due to the lack of familiarity with US financial regulatory guidelines, to which the bank’s legal compliance officers had shown a dismissive attitude during meetings with the DFS when its internal control protocols were found to be inadequate, he added.
The DFS had approved a compliance improvement plan filed by Mega bank on March 24 before he tendered his resignation on March 29, Tsai said.
No further responses will be issued, he said.
Meanwhile, Mega Financial’s board of directors has formed a task force to satisfy DFS demands and improve money laundering controls at overseas branches, and to improve communication with foreign regulators, Mega Financial vice president Chen Chung-hsing (陳松興) told a news conference in Taipei.
Chen issued an apology and said that the severity of punitive consequences far outweighs the concerns about the high costs of meeting legal requirements, adding that the company would move away from its profit and efficiency-focused corporate culture.
Tsai is chairman of an investment subsidiary that was established to carry out plans by Ruentex Group (潤泰集團) chairman Samuel Yin (尹衍樑) to amass shares in CTBC Financial Holding Co (中信金控) in a bid to win seats on the firm’s board of directors in next year’s election.
However, market observers have said the plans might change as the Mega Bank case unfolds.
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
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