US authorities had warned Mega International Commercial Bank’s New York branch that it had violated US money laundering regulations as early as 2013, after the bank dramatically increased the size of loans to businesses affiliated with the Chinese Nationalist Party (KMT), Democratic Progressive Party (DPP) legislators said yesterday.
The lawmakers said they wondered if the KMT had been involved in money laundering to hide its assets.
DPP Legislator Wang Ding-yu (王定宇) cited an anonymous source as saying that the New York State Department of Financial Services in 2013 filed a consent order to ask the branch to take corrective actions after failing to comply with US regulations against money laundering.
Photo: George Tsorng, Taipei Times
That was prior to the department’s recent report about the New York branch’s activities last year, suggesting Mega International’s management had been aware of the branch’s failure to comply for a few years, Wang said.
The department last week fined the New York bank US$180 million for not complying with money laundering regulations, and failing to heed the order and take corrective measures.
The Financial Supervisory Commission (FSC) should have been aware of the matter in 2013, because government representatives were members of the state-controlled bank’s board of directors, he said.
“The bank and the government’s unwillingness to take immediate action on the bank’s obvious violations suggests that there was a group behind the money laundering activity,” he said.
DPP Legislator Su Chen-ching (蘇震清) said the bank increased the size of its loan to Central Investment Co — a KMT holding company — and its affiliated companies from NT$3.68 billion (US$116.07 million at the current exchange rate) in 2010 to NT$11.19 billion last year.
The activities occurred when Mckinney Tsai (蔡友才) was chairman of the bank. He had been appointed by former president Ma Ying-jeou (馬英九).
“Central Investment’s paid-in capital was just NT$11 billion, so why did Mega International Commercial Bank allow the company to borrow more money than its capital,” Su said. “If this is not hollowing out, what is?”
The DPP lawmaker said the case must be handled carefully to prevent the KMT from hiding more assets through secret channels.
DPP Legislator Lo Chih-cheng (羅致政) said the money laundering and the increase to Central Investment’s loan occurred when close Ma aide King Pu-tsung (金溥聰) was serving as the nation’s representative to Washington.
He also questioned Mega bank’s appointment of Ma’s wife, Chow Mei-ching (周美青), to a high-level position at the bank’s charity foundation and payment for her bodyguards.
Lo said the timing of Tsai’s resignation in April, just months before the scandal broke, raised the question of whether Tsai was aware of and deliberately concealed the violations.
The DPP lawmakers called on Premier Lin Chuan (林全), who on Sunday ordered the FSC to form a committee to investigate the issue, to commission a third-party agency to direct the investigation and exclude the FSC, which they said might be involved in money laundering.
They also urged investigators to identify the bank’s customers and whether its other overseas branches have been engaged in illegal activities.
ANOTHER EMERGES: The CWA yesterday said this year’s fourth storm of the typhoon season had formed in the South China Sea, but was not expected to affect Taiwan Tropical Storm Gaemi has intensified slightly as it heads toward Taiwan, where it is expected to affect the country in the coming days, the Central Weather Administration (CWA) said yesterday. As of 8am yesterday, the 120km-radius storm was 800km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost tip, moving at 9kph northwest, the agency said. A sea warning for Gaemi could be issued tonight at the earliest, it said, adding that the storm is projected to be closest to Taiwan on Wednesday or Thursday. Gaemi’s potential effect on Taiwan remains unclear, as that would depend on its direction, radius and intensity, forecasters said. Former Weather Forecast
As COVID-19 cases in Japan have been increasing for 10 consecutive weeks, people should get vaccinated before visiting the nation, the Centers for Disease Control (CDC) said. The centers reported 773 hospitalizations and 124 deaths related to COVID-19 in Taiwan last week. CDC Epidemic Intelligence Center Director Guo Hung-wei (郭宏偉) on Tuesday said the number of weekly COVID-19 cases reported in Japan has been increasing since mid-May and surpassed 55,000 cases from July 8 to July 14. The average number of COVID-19 patients at Japan’s healthcare facilities that week was also 1.39 times that of the week before and KP.3 is the dominant
The Chinese Communist Party’s (CCP) working group for Taiwan-related policies is likely to be upgraded to a committee-level body, a report commissioned by the Mainland Affairs Council (MAC) said. As Chinese President Xi Jinping (習近平) is increasingly likely to upgrade the CCP’s Central Leading Group for Taiwan Affairs, Taiwanese authorities should prepare by researching Xi and the CCP, the report said. At the third plenary session of the 20th Central Committee of the CCP, which ended on Thursday last week, the party set a target of 2029 for the completion of some tasks, meaning that Xi is likely preparing to
US-CHINA TRADE DISPUTE: Despite Beijing’s offer of preferential treatment, the lure of China has dimmed as Taiwanese and international investors move out Japan and the US have become the favored destinations for Taiwanese graduates as China’s attraction has waned over the years, the Ministry of Labor said. According to the ministry’s latest income and employment advisory published this month, 3,215 Taiwanese university graduates from the class of 2020 went to Japan, surpassing for the first time the 2,881 graduates who went to China. A total of 2,300 graduates from the class of 2021 went to the US, compared with the 2,262 who went to China, the document showed. The trend continued for the class of 2023, of whom 1,460 went to Japan, 1,334 went to