The chairman of Taiwan’s Financial Supervisory Commission (FSC) stepped down on Monday as criticism grows over the watchdog’s effectiveness after state-run institution Mega Financial’s New York branch was fined $180 million by U.S. authorities for breaching anti-money laundering rules.
Taiwan’s cabinet accepted Ding Kung-Wha’s resignation with a probe by President Tsai Ing-wen’s administration under way into violations of U.S. regulations that included lax attention to risk exposure in Panama. As emergency task force has been set up to supervise the investigation. In a statement released by the FSC, Ding said he hoped his resignation would reduce damage to the FSC over the Mega Financial scandal. President Tsai has said the case had damaged Taiwan’s reputation and created public mistrust about supervision of the financial sector.
Hsu said Ding’s view was that he had done as much as he could in his role as chairman to assist the investigation and efforts to improve the FSC. Ding’s successor has yet to be selected, Hsu added. In addition to the Mega Financial scandal, the FSC has faced criticism over its handling of a case involving XPEC Entertainment, a Taiwanese gaming software developer.
Investors in XPEC have suffered heavy losses after a tender offer for of a stake in the company by a Japanese suitor went sour, domestic media have reported, with some complaining the FSC should have taken regulatory action over the way the offer was managed.