Taiwan's new financial watchdog vows to prioritise probe into Mega Financial

Mega Financial Holding Co

27/10/2016 07:59

* New financial regulator takes office amid Mega Financial 
scandal 
    * Lawmakers question whether he has necessary experience 
    * Lee says can handle challenge, will restore FSC's public 
image 
 
    By Faith Hung 
    TAIPEI, Oct 27 (Reuters) - Taiwan's new top financial cop 
has said he will personally work to tackle a money laundering 
scandal that has engulfed the island's top financial officials 
and led to the resignation of his predecessor.  
    Lee Ruey-tsang, who took over as chairman of the Financial 
Supervisory Commission (FSC) on Thursday, said he will 
prioritise an investigation into whether Mega Financial Holding 
 2886.TW  had breached United States money laundering rules. 
    The FSC launched the probe in August after the New York's 
financial regulator fined the Taiwan bank $180 million for money 
laundering breaches at its New York branch.  urn:newsml:reuters.com:*:nL3N1B0416 
    "Investigating Mega Financial and strengthening measures 
against money laundering are my main priorities," Lee told 
Reuters late on Wednesday. "I'm confident the FSC can 
effectively investigate Mega. There are many lessons to learn."  
    Lee, 65, was appointed to the role last week after his 
predecessor Ding Kung-Wha stepped down earlier this month amid 
mounting public criticism over the watchdog's effectiveness. 
    Taiwan President Tsai Ing-wen said the Mega scandal has 
damaged Taiwan's reputation and created public mistrust around 
the supervision of Taiwan's financial sector.  urn:newsml:reuters.com:*:nL3N1BC1PZ 
    Tsai's administration has ordered an investigation into 
Dung, a serving finance minister and four other regulators over 
their culpability in the scandal.  urn:newsml:reuters.com:*:nL3N1CA0AX 
    The FSC is also under fire for its handling of a case 
involving Taiwanese gaming software maker XPEC Entertainment, 
after investors lost money when an offer for a stake in the 
company by a Japanese suitor went sour, a case Lee told Reuters 
earlier in the week he would also be looking into. 
    Some lawmakers have questioned the appointment of Lee, a 
career public servant, saying he may not have the experience 
necessary to oversee the banking, insurance, and broking 
sectors. 
    "Lee is a complete layman,"  said Lai Shyh-bao, a prominent 
legislator on the finance committee with the opposition 
Kuomintang Party. "They could not find anybody else who would 
take this tough job." 
    Lee, who was previously chairman of Bank of Kaohsiung 
 2836.TW , said he was confident the FSC could address the 
challenges and that he would seek to restore the public image of 
the regulator.      
   "My superior asked me to boost morale of the FSC. I'm very 
experienced with that," Lee said. 
 
 (Reporting by Faith Hung; Additional reporting by Michelle 
Price in HONG KONG; Editing by Shri Navaratnam) 
 ((faith.hung@thomsonreuters.com; 8862 2500 4893; Reuters 
Messaging: faith.hung.thomsonreuters.com@reuters.net)) 
 
Keywords: TAIWAN FINANCIALREGULATOR/