The Ministry of Finance yesterday said that it has approved the resignation of state-run First Financial Holding Co (第一金控) chairman Jason Liao (廖燦昌) and is seeking a better understanding of the charges implicating several other high-ranking banking officials over alleged irregular lending to cash-strained Far Eastern Air Transport Corp (遠東航空).
Liao offered to step down earlier yesterday after the Taipei District Prosecutors’ Office indicted 10 people, including Liao, Land Bank of Taiwan (土地銀行) chairman Hwang Bor-chang (黃柏川) and Taiwan Cooperative Bank (合庫銀行) president Chen Shih-ching (陳世卿).
Deputy Minister of Finance Frank Juan (阮清華) told reporters that the ministry respected Liao’s wish to separate his legal suits from First Financial’s operation.
Photo: Tu Chien-jung, Taipei Times
Liao has been released from all positions and duties at the bank-focused conglomerate and its subsidiaries, the ministry said.
As for Hwang, Chen and other bank executives, Juan said the ministry would first sort out their involvement in the case before making further decisions.
Liao and Hwang pressured lower-ranking colleagues to approve loans to Far Eastern Air against their professional judgement during their stint in 2009 as Taiwan Cooperative Bank chairman and vice president respectively, prosecutors said.
Liao resigned from Taiwan Cooperative Financial Holding Co (合作金控), the parent of the state-run lender, in November 2017 to take responsibility for losses linked to a loan default by Kaohsiung-based Ching Fu Shipbuilding Co (慶富造船).
However, in April last year, he was tapped to head First Financial during an executive reshuffle which also saw Hwang and Chen promoted to their current positions.
Far Eastern Air reportedly fabricated its financial standing to qualify for the loans that became toxic assets to Taiwan Cooperative Bank, prosecutors said.
Taiwan Cooperative Bank, the nation’s largest lender by number of branches, issued a brief statement, saying that all officials involved in handling the 2009 loan application complied with proper procedures.
The bank would rather not comment on the prosecutors’ charges and opinions until the dust settles, it said.
Land Bank of Taiwan declined to comment.
Local Chinese-language media said that the Far Eastern Air scandal would likely force First Financial to lie low and drop its bid to acquire Prudential Life Insurance Co of Taiwan (保德信人壽), the local unit of US-based Prudential Life Insurance Inc, which wants to exit the local market.
Liao is the first state-run financial institute leader to be prosecuted while in office.
The ministry would deal with any misconduct squarely after it gains a full grasp of the matter, Juan said.
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