An investigation into Mega International Commercial Bank’s (兆豐銀行) contravention of money laundering regulations escalated yesterday, as prosecutors and regulators grilled a former minister of finance and the bank’s former chairman.
Prosecutors questioned former minister of finance Chang Sheng-ford (張盛和) as part of the probe into the violation of money laundering rules by Mega Bank’s New York branch that resulted in a US$180 million fine on the state-run bank.
Chang said that he was not aware of any regulatory infractions by Mega Bank, the main subsidiary of Mega Financial Holding Co (兆豐金控), during his term as minister of finance, because the state-run company did not report the incident to the ministry.
The ministry is a major shareholder in Mega Financial and other state-run financial institutions.
Regarding media reports suggesting that he had met with former Mega Bank chairman Mckinney Tsai (蔡友才) and two accountants on Aug. 22, three days after Mega Financial received the fine, Chang said that the appointments were made prior to the incident.
Media reports said Chang and Tsai had met with accountants to help them prepare for questioning by authorities.
Chang said the meeting was intended to celebrate Tsai’s appointment as chairman of an investment unit controlled by Ruentex Group (潤泰集團) chairman Samuel Yin (尹衍樑) to carry out a hostile takeover of CTBC Financial Holding (中信金控).
Prosecutors also questioned Tsai for the second time as a suspect.
The questioning came after the Financial Supervisory Commission on Sunday questioned Tsai for seven-and-a-half hours to gain a better understanding of the incident.
The commission has summoned 27 persons of interest for questioning, including Mega Financial managers, since Friday last week.
Tsai declined to comment after leaving the prosecutors’ office last night.
The nation’s top financial regulator said it would have a complete report of its findings by the end of next month.
Although Tsai tendered his resignation from Mega Financial in March, the commission could classify his departure as a termination, allowing authorities to punish Tsai and bar him from holding positions in a banking or financial institution for the next five years, the commission said.
In related news, Deputy Minister of Finance Su Jain-rong (蘇建榮) yesterday confirmed that Mega Financial chairman Shiu Kuang-si (徐光曦) has left for the US to check on the operations of the company’s branches there.
Su’s statement came in the wake of media reports that Shiu and a delegation were on their way to the US to meet with financial authorities in New York, Chicago, Silicon Valley and Los Angeles, where Mega Bank has branches.
According to the reports, it was Shiu’s second trip to the US in two weeks to deal with the fallout of the scandal.
Mega Bank was the first Taiwanese bank to receive a penalty for flouting money laundering regulations in the US.
Shiu, who was appointed chairman of Mega Financial earlier this month, is traveling to the US to gain firsthand information about the bank’s overseas business, Su said.
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