Taiwan prosecutors seek warrant to detain ex-Mega Financial execs; separate FinMin probe (updated)

Mega Financial Holding Co

04/10/2016 11:01

* Former execs pose 'risk of flight' - prosecutor 
    * Govt orders finance minister, others probed on oversight 
    * Scandal over breach of U.S. anti-money laundering rules 
 
 (Recasts, adds prosecutor comments) 
    By Faith Hung 
    TAIPEI, Oct 4 (Reuters) - Taiwanese prosecutors said on 
Tuesday they will seek court approval for a warrant to detain 
the ex-chairman of Mega Financial Holding  2886.TW  and a key 
former executive that they suspect of involvement in breaching 
anti-money laundering rules at the New York branch of the 
state-run firm's banking arm.    
    The latest twist in a scandal that has convulsed Taiwan's 
financial services sector comes the day after the government 
ordered a probe to find out whether the island's finance 
minister and other officials bear responsibility for slack 
oversight in a case that led to a $180 million fine. 
 urn:newsml:reuters.com:*:nL3N1C91NG 
    Prosecutors said on Tuesday they suspect former Mega 
chairman Mckinney Tsai and former chief secretary Wang Chi-pang 
could be involved in the breach of anti-money laundering rules. 
    "We will ask court shortly to take them into custody as 
suspects of serious crimes, who pose a risk of flight and 
destroying evidence," Chang Chieh-chin, deputy chief prosecutor 
of the Taipei District Prosecutors Office, told Reuters by 
telephone.   
    Tsai and Wang could not be reached for comment.  
    The scandal claimed its first victim in the island's 
administration on Monday when Ding Kung-Wha, the chairman of 
Taiwan's Financial Supervisory Commission (FSC), stepped down 
amid mounting criticism over the watchdog's effectiveness. 
    Meanwhile current finance minister Sheu Yu-jer and 
ex-finance minister Chang Sheng-ford will be investigated by 
Taiwan's Control Yuan, an investigatory agency that monitors 
government, the cabinet said in a statement late on Monday. 
Ex-FSC chief Ding is among the officials the Control Yuan probe. 
    The agency will determine whether there was "insufficient 
oversight" in a case that Taiwan's President Tsai Ing-wen has 
said damaged the island's reputation and created public mistrust 
about supervision of the financial sector.  urn:newsml:reuters.com:*:nL3N1BC1PZ 
    As well as Chang, Sheu and Ding, ex-FSC chiefs William Tseng 
and Chen Yu-chang and ex-vice chairperson Jennifer Wang also 
face investigation by the Control Yuan. All of those to be 
probed who served in their respective roles over a period from 
2010 to 2016, the cabinet statement said.  
    Finance minister Sheu, his predecessor Chang and the former 
FSC officials could not be reached for comment.  
    President Tsai's opponents on the island said on Monday that 
ex-FSC chief Ding's departure was a symbolic political gesture 
that put disproportionate blame on the official, who only 
assumed his position with the FSC in May of this year. 
    A veteran of Taiwan's administration not widely known in 
international finance circles, Ding previously served as chief 
of the Taipei Exchange and as a finance ministry official. 
 
 (Reporting by Faith Hung; Editing by Kenneth Maxwell) 
 ((faith.hung@thomsonreuters.com; 8862 2500 4893; Reuters 
Messaging: faith.hung.thomsonreuters.com@thomsonreuters.net)) 
 
Keywords: TAIWAN MEGAFINANCIAL/