Taiwan prosecutors detain former Mega Financial chief in U.S. scandal probe (updated)

Mega Financial Holding Co

05/10/2016 08:15

* Mega's ex-chairman Tsai, former chief secretary Wang 
detained 
    * Duo could be detained for up to two months 
 
 (Adds background) 
    TAIPEI, Oct 5 (Reuters) - Taiwan prosecutors said on 
Wednesday they have detained the ex-chairman of Mega Financial 
Holding  2886.TW  and a key former executive of the company, 
following a government probe into the state-run group's 
violation of U.S. banking regulations. 
    Prosecutors have taken former Mega chairman McKinney Tsai 
and former chief secretary Wang Chi-pang into custody as 
suspects of serious crimes, in part because they could pose "a 
risk of flight and destroying evidence" related to violations at 
the New York branch of Mega's banking arm, said Chang 
Chieh-chin, deputy chief prosecutor of the Taipei District 
Prosecutors Office. 
    Chang had said on Tuesday Tsai and Wang were suspected of 
being involved in breaching of anti-money laundering rules. 
    The duo could be detained for up to two months, Chang said. 
Tsai stepped down as chairman in March. 
    New York authorities in August slapped Mega Financial's unit 
Mega International Commercial Bank with a $180 million fine for 
violations that included lax attention to risk exposure in 
Panama.  urn:newsml:reuters.com:*:nL3N1B0416 
    It was the first time in a decade that a Taiwan-based 
financial institution was penalized by U.S. authorities.  
Taiwan's President Tsai Ing-wen said the case damaged the 
island's reputation and created public mistrust about 
supervision of the financial sector.   
    Current finance minister Sheu Yu-jer and ex-finance minister 
Chang Sheng-ford will also be investigated by Taiwan's Control 
Yuan, an investigative agency that monitors government, the 
cabinet said in a statement late on Monday.  urn:newsml:reuters.com:*:nL3N1CA0AX  
    The government ordered the Control Yuan probe this week to 
find out whether the finance minister and other officials were 
responsible for inadequate oversight.  
    Taiwan is also currently investigating whether Mega 
Financial broke local criminal laws. 
 
 (Reporting by Faith Hung and Jeanny Kao; Editing by Sam Holmes 
and Muralikumar Anantharaman) 
 ((faith.hung@thomsonreuters.com; 8862 2500 4893; Reuters 
Messaging: faith.hung.thomsonreuters.com@thomsonreuters.net)) 
 
Keywords: TAIWAN MEGAFINANCIAL/