Financial Regulatory Chief Resigns Over Mega Bank Case

Financial Regulatory Chief Resigns Over Mega Bank Case

Source: All Taipei newspapers     October 4, 2016

Ding Kung-wha (丁克華), Chairman of the Financial Supervisory Commission (FSC), resigned yesterday over scandals involving Mega International Commercial Bank's (兆豐銀行) New York branch and the market turmoil that occurred after a Japan-based firm defaulted on acquiring Taiwan's XPEC Entertainment Inc (樂陞科技).

In addition, FSC Vice Chairman Kuei Hsien-nung (桂先農) also resigned. The resignations of Ding and Kuei were both immediately approved by Premier Lin Chuan (林全).

Ding, who held his post for less than five months, is the first Cabinet member to resign since President Tsai Ing-wen (蔡英文) was sworn into office on May 20. 

Since Ding took office as FSC Chairman in May, a series of bank scandals have broken out, including the high-profile Mega Bank case, causing the public to cast doubts over the efficacy of the government’s financial regulatory mechanisms. 

On September 29, the Legislative Yuan’s Finance Committee held a closed-door meeting to allow legislators to view the original bank documents related to the 174 suspicious transactions involving a total of 76 foreign clients in the Mega Bank case.

However, some pro-Green legislators were rather disappointed after viewing the documents as they did not find anything implicating the KMT in the case. They pointed their fingers at FSC Chairman Ding Kung-wha for not doing his job well, thus damaging the reputation of the DPP government.   

Some DPP legislators even went so far as to demand that Ding step down to shoulder responsibility. 

In a statement issued yesterday, Ding stated that given the fact that people kept questioning him, as well as the FSC, over the handling of the Mega Bank case, he decided to resign to defend his integrity and hoped that his resignation would put an end to the harm done to the FSC.           

Tseng Ming-chung (曾銘宗), a KMT legislator and the last FSC Chairman under the Ma Ying-jeou (馬英九) government, was shocked to learn of Ding's resignation and expressed regrets over Ding's decision.

Tseng stated, “The Mega Bank case merely involves administrative negligence, but the case has been totally politicized. Ding asked to step down to take full responsibility. It is regrettable that the new government is still unable to face public issues in a rational manner.”    

Tseng added, “Society’s irrationality has prevented people with high ideals from serving in the government. Ding’s resignation will probably cause a domino effect in Lin Chun’s Cabinet. Now, nobody wants to serve in the Cabinet. I am afraid to say that in the future, nobody will be willing to take up even the premiership.”    

The Mega Bank investigative committee under the Executive Yuan held a meeting yesterday, during which committee members decided to refer former FSC chiefs Chen Yu-chang (陳裕璋), Tseng Ming-chung (曾銘宗), Jennifer Wang (王儷玲) and the outgoing Chairman Ding, as well as former finance minister Chang Sheng-ford (張盛和) and current finance minister Sheu Yu-jer (許虞哲) to the Control Yuan for investigation regarding their responsibility in the Mega Bank case.  

The committee members decided to refer these officials to the Control Yuan for investigation because the Mega Bank case started in the year of 2012 when the New York Department of Financial Services (NYDFS) concluded in its report that Mega Bank’s New York branch had failed to fully comply with local banking legislation and  regulations. After NYDFS imposed fines on Mega Bank’s Panama branch in March 2013, the ROC competent government agencies had also failed to fulfill its duty in overseeing the matter.  

Tseng noted that he had served as FSC Chairman from August 2013 to January 2016, and that if the Control Yuan should conclude in the future that he had failed to fulfill his duty as FSC Chairman at the time, he would accept responsibility for the Mega Bank case.     

On September 21, Tseng, on his own initiative, reported to the Control Yuan to ask for an investigation into the Mega Bank case, saying that he would not shirk responsibility if the Control Yuan found him to be responsible. However, he stressed that he would not take political mudslinging lying down.  

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